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TriplePoint Venture Growth BDC Corp. - Quarter Report: 2020 June (Form 10-Q)

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________________________________________________________________________________________________
Form 10-Q
________________________________________________________________________________________________________________________________________________
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM                      TO                     
COMMISSION FILE NUMBER: 814-01044
________________________________________________________________________________________________________________________________________________
TriplePoint Venture Growth BDC Corp.
(Exact name of registrant as specified in its charter)
________________________________________________________________________________________________________________________________________________
MARYLAND
 
46-3082016
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
TriplePoint Venture Growth BDC Corp.
2755 Sand Hill Road, Suite 150, Menlo Park, California 94025
(Address of principal executive office)
(650) 854-2090
(Registrant’s telephone number, including area code)
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
 
TPVG
 
The New York Stock Exchange
5.75% Notes due 2022
 
TPVY
 
The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
________________________________________________________________________________________________________________________________________________
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
x
Non-accelerated filer
¨
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
As of August 5, 2020, the Registrant had 30,784,352 shares of common stock, $0.01 par value per share, outstanding.

 



TriplePoint Venture Growth BDC Corp.
TABLE OF CONTENTS
 
 
Page
PART I. FINANCIAL INFORMATION
 
Item 1.
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 



PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except per share data)
 
June 30, 2020
 
December 31, 2019
 
(unaudited)
 
 
Assets
 
 
 
Investments at fair value (amortized cost of $708,540 and $660,675, respectively)
$
692,853

 
$
653,129

Cash
19,080

 
20,285

Restricted cash
3,871

 
6,156

Deferred credit facility costs
1,035

 
1,603

Prepaid expenses and other assets
1,999

 
2,975

Total assets
$
718,838

 
$
684,148

 
 
 
 
Liabilities
 
 
 
Revolving Credit Facility
$
158,000

 
$
262,300

2022 Notes, net
73,709

 
73,454

2025 Notes, net
69,047

 

Base management fee payable
3,235

 
2,462

Income incentive fee payable
2,884

 
1,362

Payable to directors and officers

 
86

Other accrued expenses and liabilities
6,440

 
11,978

Total liabilities
$
313,315

 
$
351,642

Commitments and Contingencies (Note 7)
 
 
 
 
 
 
 
Net assets
 
 
 
Preferred stock, par value $0.01 per share (50,000 shares authorized; no shares issued and outstanding, respectively)
$

 
$

Common stock, par value $0.01 per share (450,000 shares authorized; 30,784 and 24,923 shares issued and outstanding, respectively)
308

 
249

Paid-in capital in excess of par value
412,016

 
333,052

Total distributable earnings (loss)
(6,801
)
 
(795
)
Total net assets
$
405,523

 
$
332,506

Total liabilities and net assets
$
718,838

 
$
684,148

 
 
 
 
Net asset value per share
$
13.17

 
$
13.34


See accompanying notes to consolidated financial statements.

1


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Investment income
 
 
 
 
 
 
 
Interest income from investments
$
23,269

 
$
17,896

 
$
43,542

 
$
35,043

Other income
 
 
 
 
 
 
 
Expirations / terminations of unfunded commitments
149

 
158

 
697

 
316

Other fees
378

 
887

 
398

 
1,073

Total investment and other income
23,796

 
18,941

 
44,637

 
36,432

 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
Base management fee
3,235

 
2,076

 
6,010

 
3,837

Income incentive fee
2,884

 
2,530

 
2,884

 
5,009

Interest expense and amortization of fees
4,312

 
3,010

 
8,474

 
5,213

Administration agreement expenses
574

 
353

 
1,255

 
775

General and administrative expenses
1,255

 
849

 
2,241

 
1,560

Total operating expenses
12,260

 
8,818

 
20,864

 
16,394

 
 
 
 
 
 
 
 
Net investment income
11,536

 
10,123

 
23,773

 
20,038

 
 
 
 
 
 
 
 
Net realized and unrealized gains (losses)
 
 
 
 
 
 
 
Net realized gains (losses) on investments
801

 
(17
)
 
471

 
(46
)
Net change in unrealized gains (losses) on investments
8,885

 
13,755

 
(8,140
)
 
14,938

Net realized and unrealized gains (losses)
9,686

 
13,738

 
(7,669
)
 
14,892

 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
21,222

 
$
23,861

 
$
16,104

 
$
34,930

 
 
 
 
 
 
 
 
Basic and diluted net investment income per share
$
0.38

 
$
0.41

 
$
0.78

 
$
0.81

Basic and diluted net increase (decrease) in net assets per share
$
0.69

 
$
0.96

 
$
0.53

 
$
1.41

Basic and diluted weighted average shares of common stock outstanding
30,747

 
24,827

 
30,315

 
24,805


See accompanying notes to consolidated financial statements.

2


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
(in thousands)
 
 
 
Paid-in capital in excess of par value
 
Total distributable earnings (loss)
 
Net assets
 
Common stock
 
 
 
 
Shares
 
Par value
 
 
 
Balance at March 31, 2019
24,820

 
$
248

 
$
331,847

 
$
5,104

 
$
337,199

Net increase (decrease) in net assets resulting from operations

 

 

 
23,861

 
23,861

Distributions reinvested in common stock
39

 
1

 
528

 

 
529

Distributions from net investment income

 

 

 
(8,937
)
 
(8,937
)
Balance at June 30, 2019
24,859

 
$
249

 
$
332,375

 
$
20,028

 
$
352,652

 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2020
30,746

 
$
307

 
$
411,644

 
$
(16,955
)
 
$
394,996

Net increase (decrease) in net assets resulting from operations

 

 

 
21,222

 
21,222

Distributions reinvested in common stock
38

 
1

 
372

 

 
373

Distributions from net investment income

 

 

 
(11,068
)
 
(11,068
)
Balance at June 30, 2020
30,784

 
$
308

 
$
412,016

 
$
(6,801
)
 
$
405,523

 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
24,780

 
$
248

 
$
331,329

 
$
2,954

 
$
334,531

Net increase (decrease) in net assets resulting from operations

 

 

 
34,930

 
34,930

Distributions reinvested in common stock
79

 
1

 
1,046

 

 
1,047

Distributions from net investment income

 

 

 
(17,856
)
 
(17,856
)
Balance at June 30, 2019
24,859

 
$
249

 
$
332,375

 
$
20,028

 
$
352,652

 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2019
24,923

 
$
249

 
$
333,052

 
$
(795
)
 
$
332,506

Net increase (decrease) in net assets resulting from operations

 

 

 
16,104

 
16,104

Issuance of common stock
5,750

 
58

 
78,178

 

 
78,236

Distributions reinvested in common stock
111

 
1

 
786

 

 
787

Distributions from net investment income

 

 

 
(22,110
)
 
(22,110
)
Balance at June 30, 2020
30,784

 
$
308

 
$
412,016

 
$
(6,801
)
 
$
405,523


See accompanying notes to consolidated financial statements.

3


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)
 
For the Six Months Ended June 30,
 
2020
 
2019
Cash Flows from Operating Activities:
 
 
 
Net increase (decrease) in net assets resulting from operations
$
16,104

 
$
34,930

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Fundings and purchases of investments, net
(99,923
)
 
(163,103
)
Sales (purchase) of short-term investments, net

 
19,999

Principal payments and proceeds from investments
64,710

 
121,797

Payment-in-kind interest on investments
(3,616
)
 
(1,062
)
Net change in unrealized (gains) losses on investments
8,140

 
(14,938
)
Net realized (gains) losses on investments
(471
)
 
(46
)
Amortization and accretion of premiums and discounts, net
(2,783
)
 
(903
)
(Accretion) reduction of end-of-term payments, net of prepayments
(5,782
)
 
(4,074
)
Amortization of deferred financing and debt issuance costs
874

 
765

Change in operating assets and liabilities:
 
 
 
Payable for U.S. Treasury bill assets

 
(19,999
)
Prepaid expenses and other assets
976

 
(520
)
Base management fee payable
773

 
351

Income incentive fee payable
1,522

 
(28
)
Payable to directors and officers
(86
)
 
(18
)
Other accrued expenses and liabilities
(5,538
)
 
(3,521
)
Net cash (used in) provided by operating activities
(25,100
)
 
(30,370
)
Cash Flows from Financing Activities:
 
 
 
(Repayments) borrowings under revolving credit facility, net
(104,300
)
 
62,776

Distributions paid
(21,323
)
 
(16,809
)
Deferred credit facility costs

 
(1,175
)
Proceeds from issuance of 2025 Notes
68,997

 

Proceeds from issuance of common stock
78,236

 

Net cash provided by (used in) financing activities
21,610

 
44,792

Net change in cash and restricted cash
(3,490
)
 
14,422

Cash and restricted cash at beginning of period
26,441

 
9,949

Cash and restricted cash at end of period
$
22,951

 
$
24,371

 
 
 
 
Supplemental Disclosures of Cash Flow Information:
 
 
 
Cash paid for interest
$
6,842

 
$
4,248

Distributions reinvested
$
786

 
$
1,047

 
 
 
 
 
For the Six Months Ended June 30,
 
2020
 
2019
Cash
$
19,080

 
$
12,415

Restricted cash
3,871

 
11,956

Total cash and restricted cash shown in the statement of cash flows
$
22,951

 
$
24,371


See accompanying notes to consolidated financial statements.

4


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Buildings and Property
 
 
 
 
 
 
 
 
 
 
 
 
Knotel, Inc.
 
Growth Capital Loan (Prime + 4.25% interest rate, 9.50% floor, 9.00% EOT payment)
 
2/28/2019
 
$
9,000

 
$
9,258

 
$
8,873

 
8/31/2022
 
 
Growth Capital Loan (Prime + 4.25% interest rate, 9.50% floor, 9.00% EOT payment)
 
3/25/2019
 
6,000

 
6,156

 
5,885

 
9/30/2022
 
 
Growth Capital Loan (Prime + 4.25% interest rate, 9.50% floor, 9.00% EOT payment)
 
4/18/2019
 
9,000

 
9,210

 
8,783

 
10/31/2022
 
 
Growth Capital Loan (Prime + 4.25% interest rate, 9.50% floor, 9.00% EOT payment)
 
9/30/2019
 
6,000

 
6,051

 
5,701

 
3/31/2023
Total Buildings and Property - 7.21%*
 
 
 
30,000

 
30,675

 
29,242

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Applications Software
 
 
 
 
 
 
 
 
 
 
 
 
Envoy, Inc.
 
Growth Capital Loan (Prime + 6.75% interest rate, 10.00% floor, 6.25% EOT payment)
 
5/22/2020
 
1,000

 
977

 
977

 
5/31/2023
Farmer's Business Network, Inc.
 
Growth Capital Loan (12.00% interest rate)
 
2/13/2020
 
3,333

 
3,301

 
3,301

 
2/28/2022
 
 
Growth Capital Loan (12.00% interest rate)
 
3/11/2020
 
6,667

 
6,599

 
6,599

 
3/31/2022
 
 
Growth Capital Loan (12.00% interest rate)
 
4/1/2020
 
6,667

 
6,597

 
6,597

 
3/31/2022
 
 
Growth Capital Loan (12.00% interest rate)
 
6/4/2020
 
300

 
297

 
297

 
6/30/2022
 
 
 
 
 
 
16,967

 
16,794

 
16,794

 
 
HI.Q, Inc.
 
Growth Capital Loan (11.00% interest rate, 2.00% EOT payment)
 
12/17/2018
 
13,250

 
13,188

 
13,188

 
6/30/2023
OneSource Virtual, Inc.
 
Growth Capital Loan (Prime + 5.25% interest rate, 10.00% floor, 2.00% EOT payment)
 
6/29/2018
 
8,195

 
8,573

 
8,611

 
6/30/2022
 
 
Growth Capital Loan (Prime + 5.25% interest rate, 10.00% floor, 0.25% EOT payment)
 
11/5/2019
 
5,000

 
5,013

 
5,053

 
11/30/2023
 
 
Growth Capital Loan (Prime + 5.25% interest rate, 10.00% floor, 0.25% EOT payment)
 
1/31/2020
 
3,000

 
3,008

 
3,033

 
1/31/2024
 
 
 
 
 
 
16,195

 
16,594

 
16,697

 
 
Passport Labs, Inc.
 
Growth Capital Loan (9.75% interest rate, 5.25% EOT payment)
 
10/11/2018
 
19,000

 
19,044

 
18,590

 
8/31/2023
 
 
Growth Capital Loan (10.25% interest rate, 5.25% EOT payment)
 
5/15/2019
 
6,000

 
5,958

 
5,797

 
3/31/2024
 
 
Growth Capital Loan (11.00% interest rate, 8.00% EOT payment)
 
5/15/2019
 
5,000

 
4,991

 
4,854

 
5/31/2024
 
 
 
 
 
 
30,000

 
29,993

 
29,241

 
 
Quantcast Corporation
 
Growth Capital Loan (Prime + 6.25% interest rate, 10.50% floor, 6.00% EOT payment)
 
3/12/2018
 
6,025

 
6,743

 
6,754

 
3/31/2021
Total Business Applications Software - 20.63%*
 
 
 
83,437

 
84,289

 
83,651

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business to Business Marketplace
 
 
 
 
 
 
 
 
 
 
Adjust GmbH(1)(3)
 
Growth Capital Loan (Prime + 4.75% interest rate, 2.50% PIK interest rate, 12.00% floor)
 
1/29/2019
 
20,733

 
20,535

 
20,955

 
1/31/2022
 
 
Growth Capital Loan (Prime + 4.75% interest rate, 2.50% PIK interest rate, 12.00% floor)
 
1/18/2019
 
8,300

 
8,221

 
8,389

 
1/31/2022
Total Business to Business Marketplace - 7.24%*
 
 
 
29,033

 
28,756

 
29,344

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Services
 
 
 
 
 
 
 
 
 
 
 
 
Transfix, Inc.
 
Growth Capital Loan (Prime + 5.00% interest rate, 10.50% floor, 2.00% EOT payment)
 
12/23/2019
 
10,000

 
9,898

 
9,898

 
12/31/2021
Total Commercial Services - 2.44%*
 
 
 
10,000

 
9,898

 
9,898

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Non-Durables
 
 
 
 
 
 
 
 
 
 
 
 
Imperfect Foods, Inc.
 
Growth Capital Loan (Prime + 4.10% interest rate, 9.60% floor, 5.35% EOT payment)
 
10/11/2019
 
10,000

 
9,898

 
9,898

 
4/30/2023
Total Consumer Non-Durables - 2.44%*
 
 
 
10,000

 
9,898

 
9,898

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

5


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Products and Services
 
 
 
 
 
 
 
 
 
 
Outdoor Voices, Inc.
 
Growth Capital Loan (Prime + 5.00% interest rate, 10.25% floor, 9.75% EOT payment)
 
2/26/2019
 
$
4,000

 
$
4,071

 
$
4,018

 
2/28/2022
 
 
Growth Capital Loan (Prime + 5.00% interest rate, 10.25% floor, 9.75% EOT payment)
 
4/4/2019
 
6,000

 
6,074

 
5,987

 
4/30/2022
 
 
 
 
 
 
10,000

 
10,145

 
10,005

 
 
Quip NYC, Inc.
 
Growth Capital Loan (Prime + 6.75% interest rate, 12.00% floor, 6.25% EOT payment)
 
4/16/2019
 
10,000

 
10,030

 
10,030

 
4/30/2022
 
 
Growth Capital Loan (Prime + 6.75% interest rate, 12.00% floor, 6.25% EOT payment)
 
6/26/2019
 
5,000

 
4,990

 
4,990

 
6/30/2022
 
 
Growth Capital Loan (Prime + 6.75% interest rate, 12.00% floor, 6.25% EOT payment)
 
6/26/2019
 
5,000

 
4,990

 
4,990

 
6/30/2022
 
 
Growth Capital Loan (Prime + 6.75% interest rate, 12.00% floor, 6.25% EOT payment)
 
9/26/2019
 
5,000

 
4,955

 
4,955

 
9/30/2022
 
 
 
 
 
 
25,000

 
24,965

 
24,965

 
 
Total Consumer Products and Services - 8.62%*
 
 
 
35,000

 
35,110

 
34,970

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Retail
 
 
 
 
 
 
 
 
 
 
 
 
LovePop, Inc.
 
Growth Capital Loan (Prime + 4.75% interest rate, 9.75% floor, 6.75% EOT payment)
 
11/5/2018
 
10,000

 
10,263

 
10,263

 
11/30/2021
Savage X, Inc.
 
Growth Capital Loan (Prime + 2.75% interest rate, 7.50% floor, 3.50% EOT payment)
 
4/15/2020
 
1,000

 
989

 
989

 
4/30/2021
Total Consumer Retail - 2.77%*
 
 
 
11,000

 
11,252

 
11,252

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Database Software
 
 
 
 
 
 
 
 
 
 
 
 
Qubole Inc.
 
Growth Capital Loan (Prime + 6.00% interest rate, 11.00% floor, 6.75% EOT payment)
 
12/27/2019
 
10,000

 
9,949

 
9,761

 
12/31/2023
 
 
Growth Capital Loan (Prime + 6.00% interest rate, 11.00% floor, 6.75% EOT payment)
 
12/27/2019
 
5,000

 
4,974

 
4,881

 
12/31/2023
Total Database Software - 3.61%*
 
 
 
15,000

 
14,923

 
14,642

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Clothing and Accessories
 
 
 
 
 
 
 
 
 
 
FabFitFun, Inc.
 
Growth Capital Loan (10.50% interest rate, 6.00% EOT payment)
 
2/26/2018
 
2,320

 
2,562

 
2,566

 
2/28/2021
 
 
Growth Capital Loan (Prime + 6.50% interest rate, 10.50% floor, 6.50% EOT payment)
 
11/19/2019
 
5,000

 
4,928

 
4,965

 
11/30/2022
 
 
Growth Capital Loan (Prime + 6.50% interest rate, 10.50% floor, 6.50% EOT payment)
 
11/19/2019
 
5,000

 
4,928

 
4,965

 
11/30/2022
 
 
Growth Capital Loan (Prime + 6.50% interest rate, 10.50% floor, 6.50% EOT payment)
 
11/19/2019
 
5,000

 
4,928

 
4,965

 
11/30/2022
 
 
 
 
 
 
17,320

 
17,346

 
17,461

 
 
Outfittery GMBH(1)(3)
 
Growth Capital Loan (Prime + 8.25% interest rate, 13.75% floor, 11.00% EOT payment)(2)
 
8/11/2017
 
6,722

 
7,015

 
6,438

 
8/31/2022
 
 
Growth Capital Loan (12.00% interest rate, 9.00% EOT payment)(2)
 
6/7/2018
 
1,995

 
2,107

 
1,974

 
6/30/2021
 
 
Growth Capital Loan (12.75% interest rate, 9.00% EOT payment)(2)
 
12/28/2018
 
2,294

 
2,329

 
2,233

 
12/31/2021
 
 
Growth Capital Loan (Prime + 7.25% interest rate, 12.75% floor, 9.00% EOT payment)(2)
 
8/7/2019
 
3,947

 
3,859

 
3,724

 
8/31/2022
 
 
Growth Capital Loan (Prime + 7.25% interest rate, 12.75% floor, 9.00% EOT payment)(2)
 
9/23/2019
 
3,305

 
3,090

 
3,050

 
9/30/2022
 
 
Revolver (11.00% interest rate, 2.00% EOT payment)(2)
 
3/5/2020
 
3,298

 
3,158

 
3,189

 
12/31/2020
 
 
 
 
 
 
21,561

 
21,558

 
20,608

 
 
Total E-Commerce - Clothing and Accessories - 9.39%*
 
 
 
38,881

 
38,904

 
38,069

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Personal Goods
 
 
 
 
 
 
 
 
 
 
 
 
Enjoy Technology, Inc.
 
Growth Capital Loan (Prime + 5.25% interest rate, 10.00% floor, 5.50% EOT payment)
 
9/28/2018
 
8,436

 
8,689

 
8,689

 
9/30/2021

6


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Grove Collaborative, Inc.
 
Growth Capital Loan (Prime + 1.25% interest rate, 6.75% floor, 1.25% EOT payment)(2)
 
1/31/2020
 
$
11,000

 
$
11,085

 
$
11,085

 
7/31/2020
 
 
Growth Capital Loan (Prime + 2.25% interest rate, 7.75% floor, 4.75% EOT payment)(2)
 
1/31/2020
 
8,250

 
8,289

 
8,289

 
4/30/2021
 
 
Growth Capital Loan (Prime + 2.25% interest rate, 7.75% floor, 4.75% EOT payment)(2)
 
1/31/2020
 
2,667

 
2,679

 
2,679

 
4/30/2021
 
 
 
 
 
 
21,917

 
22,053

 
22,053

 
 
Total E-Commerce - Personal Goods - 7.58%*
 
 
 
30,353

 
30,742

 
30,742

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
Mind Candy Limited(1)(3)
 
Growth Capital Loan (12.00% PIK interest rate, 9.50% EOT payment)
 
6/25/2014
 
13,473

 
13,345

 
13,112

 
6/30/2022
 
 
Growth Capital Loan (9.00% PIK interest rate)(2)
 
3/17/2020
 
1,027

 
1,027

 
1,001

 
3/31/2023
 
 
 
 
 
 
14,500

 
14,372

 
14,113

 
 
Roli, Ltd.(1)(3)(7)
 
Growth Capital Loan (11.00% interest rate, 9.50% EOT payment)(2)
 
5/23/2018
 
10,732

 
10,767

 
5,441

 
5/31/2021
 
 
Growth Capital Loan (11.00% interest rate, 9.50% EOT payment)(2)
 
5/23/2018
 
1,342

 
1,346

 
680

 
5/31/2021
 
 
Growth Capital Loan (11.25% interest rate, 9.50% EOT payment)(2)
 
7/16/2018
 
1,325

 
1,317

 
674

 
7/31/2021
 
 
Revolver (Prime + 3.25% interest rate, 8.00% floor, 5.00% EOT payment)(2)
 
7/5/2018
 
129

 
129

 
66

 
10/31/2020
 
 
Revolver (Prime + 4.25% interest rate, 9.00% floor, 5.00% EOT payment)(2)
 
7/5/2018
 
1,898

 
1,898

 
974

 
10/31/2020
 
 
Revolver (Prime + 4.25% interest rate, 9.00% floor, 5.00% EOT payment)(2)
 
9/27/2018
 
4,556

 
4,556

 
2,349

 
10/31/2020
 
 
Growth Capital Loan (10.00% PIK interest rate, 10.00% EOT payment)(2)
 
6/5/2019
 
1,283

 
1,340

 
713

 
10/31/2020
 
 
Growth Capital Loan (10.00% PIK interest rate, 20.00% EOT payment)(2)
 
7/9/2019
 
627

 
627

 
339

 
10/31/2020
 
 
Growth Capital Loan (10.00% PIK interest rate, 20.00% EOT payment)(2)
 
8/28/2019
 
538

 
538

 
298

 
10/31/2020
 
 
Growth Capital Loan (10.00% PIK interest rate)(2)
 
10/24/2019
 
4,925

 
4,925

 
2,577

 
10/31/2020
 
 
Growth Capital Loan (10.00% PIK interest rate)(2)
 
4/23/2020
 
1,390

 
1,390

 
887

 
7/31/2020
 
 
 
 
 
 
28,745

 
28,833

 
14,998

 
 
Total Entertainment - 7.18%*
 
 
 
 
 
43,245

 
43,205

 
29,111

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Institution and Services
 
 
 
 
 
 
 
 
 
 
Prodigy Finance Limited(1)(3)
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
12/5/2017
 
18,744

 
20,080

 
19,555

 
12/31/2020
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
3/7/2018
 
2,291

 
2,427

 
2,334

 
3/31/2021
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
7/31/2018
 
3,436

 
3,586

 
3,394

 
7/31/2021
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
8/8/2018
 
2,603

 
2,709

 
2,554

 
8/31/2021
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
9/5/2018
 
1,562

 
1,620

 
1,522

 
9/30/2021
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
9/5/2018
 
2,603

 
2,700

 
2,536

 
9/30/2021
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
11/15/2018
 
6,248

 
6,434

 
5,998

 
11/30/2021
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
12/6/2018
 
4,165

 
4,274

 
3,969

 
12/31/2021
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
4/30/2019
 
139

 
140

 
129

 
4/30/2022
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
8/6/2019
 
278

 
278

 
251

 
8/31/2022
 
 
Growth Capital Loan (Prime + 7.75% PIK interest rate, 12.00% floor, 10.00% EOT payment)
 
4/21/2020
 
2,585

 
2,547

 
2,240

 
4/30/2023
Total Financial Institution and Services - 10.97%*
 
 
 
44,654

 
46,795

 
44,482

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Food & Drug
 
 
 
 
 
 
 
 
 
 
 
 
Freshly Inc.
 
Growth Capital Loan (Prime + 6.50% interest rate, 11.75% floor, 5.00% EOT payment)
 
10/9/2019
 
$
6,000

 
$
5,790

 
$
5,840

 
10/31/2022
 
 
Growth Capital Loan (Prime + 4.50% interest rate, 9.75% floor, 6.75% EOT payment)
 
12/30/2019
 
3,000

 
2,899

 
2,919

 
12/31/2022
 
 
Growth Capital Loan (Prime + 6.00% interest rate, 11.25% floor, 6.50% EOT payment)
 
12/30/2019
 
3,000

 
2,894

 
2,916

 
6/30/2022
 
 
Growth Capital Loan (Prime + 4.50% interest rate, 9.75% floor, 6.75% EOT payment)
 
3/20/2020
 
3,000

 
2,869

 
2,891

 
3/31/2023
Total Food & Drug - 3.59%*
 
 
 
15,000

 
14,452

 
14,566

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Technology Systems
 
 
 
 
 
 
 
 
 
 
 
 
Nurx Inc.
 
Growth Capital Loan (Prime + 4.50% interest rate, 10.00% floor, 7.75% EOT payment)
 
11/5/2019
 
20,000

 
19,953

 
19,953

 
11/30/2023
Total Healthcare Technology Systems - 4.92%*
 
 
 
20,000

 
19,953

 
19,953

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Household & Office Goods
 
 
 
 
 
 
 
 
 
 
 
 
Casper Sleep Inc.
 
Growth Capital Loan (Prime + 7.25% interest rate, 12.50% floor, 7.50% EOT payment)
 
8/9/2019
 
15,000

 
14,939

 
14,939

 
8/31/2023
 
 
Growth Capital Loan (Prime + 6.00% interest rate, 11.25% floor, 6.25% EOT payment)
 
11/1/2019
 
15,000

 
14,926

 
14,926

 
10/31/2022
Total Household & Office Goods - 7.36%*
 
 
 
30,000

 
29,865

 
29,865

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Human Resources/Recruitment
 
 
 
 
 
 
 
 
 
 
 
 
Hired, Inc.
 
Growth Capital Loan (Prime + 5.00% interest rate, 9.75% floor, 6.00% EOT payment)
 
3/6/2019
 
5,000

 
5,053

 
4,950

 
9/30/2022
 
 
Growth Capital Loan (Prime + 6.50% interest rate, 11.25% floor, 7.25% EOT payment)
 
3/6/2019
 
5,000

 
5,056

 
4,921

 
3/31/2022
Total Human Resources/Recruitment - 2.43%*
 
 
 
10,000

 
10,109

 
9,871

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multimedia and Design Software
 
 
 
 
 
 
 
 
 
 
Pencil and Pixel, Inc.
 
Growth Capital Loan (10.00% interest rate, 6.50% EOT payment)
 
3/20/2020
 
10,000

 
9,831

 
9,679

 
3/31/2023
Total Multimedia and Design Software - 2.39%*
 
 
 
10,000

 
9,831

 
9,679

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Network Systems Management Software
 
 
 
 
 
 
 
 
 
 
Signifyd, Inc.
 
Growth Capital Loan (Prime + 7.00% interest rate, 12.25% floor, 8.75% EOT payment)
 
4/8/2020
 
6,000

 
5,894

 
5,894

 
10/31/2023
Virtual Instruments Corporation
 
Growth Capital Loan (10.00% interest rate)
 
4/4/2016
 
5,000

 
5,000

 
5,177

 
4/4/2021
 
 
Growth Capital Loan (5.00% PIK interest rate)
 
8/7/2018
 
31,205

 
31,205

 
28,852

 
4/4/2022
 
 
 
 
 
 
36,205

 
36,205

 
34,029

 
 
Total Network Systems Management Software - 9.84%*
 
 
 
42,205

 
42,099

 
39,923

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Financial Services
 
 
 
 
 
 
 
 
 
 
 
 
Upgrade, Inc.
 
Growth Capital Loan (9.50% interest rate, 8.50% EOT payment)
 
1/18/2019
 
6,000

 
6,121

 
6,121

 
1/31/2023
 
 
Growth Capital Loan (11.00% interest rate, 8.50% EOT payment)
 
1/18/2019
 
1,522

 
1,550

 
1,550

 
1/31/2023
 
 
Growth Capital Loan (9.25% interest rate, 2.75% EOT payment)
 
1/18/2019
 
6,391

 
6,662

 
6,662

 
1/31/2021
 
 
Growth Capital Loan (9.50% interest rate, 6.25% EOT payment)
 
3/1/2019
 
5,152

 
5,306

 
5,306

 
2/28/2022
Total Other Financial Services - 4.84%*
 
 
 
19,065

 
19,639

 
19,639

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate Services
 
 
 
 
 
 
 
 
 
 
 
 
HomeLight, Inc.
 
Growth Capital Loan (13.00% interest rate)
 
4/16/2019
 
2,000

 
1,976

 
1,987

 
4/30/2022

8


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Sonder USA, Inc.
 
Growth Capital Loan (Prime + 5.75% interest rate, 10.50% floor, 5.25% EOT payment)
 
12/28/2018
 
$
20,000

 
$
20,308

 
$
20,141

 
6/30/2022
 
 
Growth Capital Loan (Prime + 5.75% interest rate, 10.25% floor, 4.75% EOT payment)
 
3/6/2020
 
5,000

 
4,956

 
4,869

 
3/31/2024
 
 
Growth Capital Loan (Prime + 5.75% interest rate, 10.25% floor, 4.75% EOT payment)
 
3/6/2020
 
2,000

 
1,971

 
1,936

 
3/31/2024
 
 
 
 
 
 
27,000

 
27,235

 
26,946

 
 
Total Real Estate Services - 7.13%*
 
 
 
29,000

 
29,211

 
28,933

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restaurant / Food Service
 
 
 
 
 
 
 
 
 
 
 
 
Munchery, Inc.(7)
 
Growth Capital Loan (Prime + 8.25% PIK interest rate, 11.50% floor, 8.75% EOT payment)
 
6/30/2016
 
2,504

 
2,645

 
1,347

 
6/30/2019
 
 
Growth Capital Loan (Prime + 8.25% PIK interest rate, 11.50% floor)(2)
 
4/25/2018
 
300

 
300

 
153

 
6/30/2019
Total Restaurant / Food Service - 0.37%*
 
 
 
2,804

 
2,945

 
1,500

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Security Services
 
 
 
 
 
 
 
 
 
 
 
 
ForgeRock, Inc.
 
Growth Capital Loan (Prime + 2.90% interest rate, 8.40% floor, 8.00% EOT payment)
 
3/27/2019
 
10,000

 
10,100

 
10,100

 
9/30/2023
 
 
Growth Capital Loan (Prime + 3.70% interest rate, 9.20% floor, 8.00% EOT payment)
 
9/30/2019
 
10,000

 
9,980

 
9,980

 
12/31/2023
 
 
Growth Capital Loan (Prime + 4.50% interest rate, 10.00% floor, 8.00% EOT payment)
 
12/23/2019
 
10,000

 
9,927

 
9,927

 
12/31/2023
Total Security Services - 7.40%*
 
 
 
30,000

 
30,007

 
30,007

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shopping Facilitators
 
 
 
 
 
 
 
 
 
 
 
 
Moda Operandi, Inc.
 
Growth Capital Loan (Prime + 6.25% interest rate, 11.75% floor, 7.25% EOT payment)
 
10/21/2019
 
10,000

 
9,992

 
9,853

 
4/30/2022
 
 
Growth Capital Loan (Prime + 6.25% interest rate, 11.75% floor, 7.25% EOT payment)
 
11/27/2019
 
5,000

 
4,979

 
4,907

 
5/31/2022
 
 
Growth Capital Loan (Prime + 6.25% interest rate, 11.75% floor, 7.25% EOT payment)
 
1/6/2020
 
10,000

 
9,917

 
9,762

 
7/31/2022
Total Shopping Facilitators - 6.05%*
 
 
 
25,000

 
24,888

 
24,522

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Social/Platform Software
 
 
 
 
 
 
 
 
 
 
 
 
ClassPass, Inc.
 
Growth Capital Loan (Prime + 5.00% interest rate, 10.25% floor, 8.25% EOT payment)
 
8/15/2019
 
15,000

 
15,047

 
14,919

 
8/31/2023
 
 
Growth Capital Loan (Prime + 5.00% interest rate, 10.25% floor, 8.25% EOT payment)
 
9/30/2019
 
15,000

 
15,001

 
14,869

 
9/30/2023
Total Social/Platform Software - 7.35%*
 
 
 
30,000

 
30,048

 
29,788

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Travel & Leisure
 
 
 
 
 
 
 
 
 
 
 
 
GoEuro Corp.(1)(3)
 
Growth Capital Loan (10.25% interest rate, 4.00% EOT payment)
 
10/30/2019
 
20,000

 
19,729

 
19,484

 
10/31/2022
 
 
Growth Capital Loan (11.00% interest rate, 8.50% EOT payment)
 
3/27/2020
 
10,000

 
9,727

 
9,502

 
3/31/2024
Total Travel & Leisure - 7.15%*
 
 
 
 
 
30,000

 
29,456

 
28,986

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt Investments - 160.91%*
 
 
 
$
673,677

 
$
676,950

 
$
652,533

 
 

9


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Warrant
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
Warrant Investments(8)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advertising / Marketing
 
 
 
 
 
 
 
 
 
 
InMobi Pte Ltd.(1)(3)
 
Ordinary Shares(2)
 
12/13/2013
 
48,500

 
$
35

 
$
12

Total Advertising / Marketing - 0.00%*
 
 
 
 
 
48,500

 
35

 
12

 
 
 
 
 
 
 
 
 
 
 
Building Materials/Construction Machinery
 
 
 
 
 
 
 
 
 
 
View, Inc.
 
Preferred Stock(2)
 
6/13/2017
 
4,545,455

 
500

 
591

Total Building Materials/Construction Machinery - 0.15%*
 
 
 
4,545,455

 
500

 
591

 
 
 
 
 
 
 
 
 
 
 
Buildings and Property
 
 
 
 
 
 
 
 
 
 
Knotel, Inc.
 
Preferred Stock
 
2/19/2019
 
360,260

 
159

 
288

Total Buildings and Property - 0.07%*
 
 
 
 
 
360,260

 
159

 
288

 
 
 
 
 
 
 
 
 
 
 
Business Applications Software
 
 
 
 
 
 
 
 
 
 
Envoy, Inc.
 
Preferred Stock
 
5/8/2020
 
35,893

 
82

 
86

Farmer's Business Network, Inc.
 
Preferred Stock
 
1/3/2020
 
37,666

 
33

 
43

FinancialForce.com, Inc.
 
Preferred Stock(2)
 
6/20/2016
 
547,440

 
1,540

 
2,480

HI.Q, Inc.
 
Preferred Stock
 
12/17/2018
 
606,952

 
196

 
437

OneSource Virtual, Inc.
 
Preferred Stock
 
6/25/2018
 
70,773

 
161

 
335

Passport Labs, Inc.
 
Preferred Stock
 
9/28/2018
 
21,929

 
303

 
590

Quantcast Corporation
 
Cash Exit Fee(5)
 
8/9/2018
 

 
213

 
161

Toast, Inc.
 
Preferred Stock(2)
 
2/1/2018
 
26,325

 
27

 
401

Total Business Applications Software - 1.12%*
 
 
 
 
 
1,346,978

 
2,555

 
4,533

 
 
 
 
 
 
 
 
 
 
 
Business to Business Marketplace
 
 
 
 
 
 
 
 
 
 
Factual, Inc.
 
Preferred Stock
 
9/4/2018
 
47,072

 
86

 
56

Optoro, Inc.
 
Preferred Stock(2)
 
7/13/2015
 
10,346

 
40

 
37

RetailNext, Inc.
 
Preferred Stock(2)
 
11/16/2017
 
123,420

 
80

 
111

Total Business to Business Marketplace - 0.05%*
 
 
 
 
 
180,838

 
206

 
204

 
 
 
 
 
 
 
 
 
 
 
Commercial Services
 
 
 
 
 
 
 
 
 
 
Transfix, Inc.
 
Preferred Stock
 
5/31/2019
 
133,502

 
188

 
188

Total Commercial Services - 0.05%*
 
 
 
 
 
133,502

 
188

 
188

 
 
 
 
 
 
 
 
 
 
 
Conferencing Equipment / Services
 
 
 
 
 
 
 
 
 
 
Fuze, Inc. (fka Thinking Phone Networks, Inc.)
 
Preferred Stock(2)
 
9/29/2015
 
323,381

 
670

 
205

Total Conferencing Equipment / Services - 0.05%*
 
 
 
 
 
323,381

 
670

 
205

 
 
 
 
 
 
 
 
 
 
 
Consumer Non-Durables
 
 
 
 
 
 
 
 
 
 
Hims, Inc.
 
Preferred Stock(2)
 
11/27/2019
 
198,126

 
73

 
131

Imperfect Foods, Inc.
 
Preferred Stock
 
6/6/2019
 
43,746

 
189

 
130

Total Consumer Non-Durables - 0.06%*
 
 
 
 
 
241,872

 
262

 
261

 
 
 
 
 
 
 
 
 
 
 
Consumer Products and Services
 
 
 
 
 
 
 
 
 
 
Clutter, Inc.
 
Preferred Stock
 
10/18/2018
 
77,434

 
363

 
403

Outdoor Voices, Inc.
 
Common Stock
 
2/26/2019
 
255,000

 
360

 

Quip NYC, Inc.
 
Preferred Stock
 
11/26/2018
 
41,272

 
455

 
455

Total Consumer Products and Services - 0.21%*
 
 
 
 
 
373,706

 
1,178

 
858

 
 
 
 
 
 
 
 
 
 
 
Consumer Retail
 
 
 
 
 
 
 
 
 
 
LovePop, Inc.
 
Preferred Stock
 
10/23/2018
 
163,463

 
168

 
127

Savage X, Inc.
 
Preferred Stock
 
4/7/2020
 
7,241

 
12

 
22

Total Consumer Retail - 0.04%*
 
 
 
 
 
170,704

 
180

 
149

 
 
 
 
 
 
 
 
 
 
 

10


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Warrant
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
Database Software
 
 
 
 
 
 
 
 
 
 
Qubole Inc.
 
Preferred Stock
 
11/21/2018
 
265,266

 
$
122

 
$
122

Total Database Software - 0.03%*
 
 
 
 
 
265,266

 
122

 
122

 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Clothing and Accessories
 
 
 
 
 
 
 
 
 
 
FabFitFun, Inc.
 
Preferred Stock
 
11/20/2017
 
173,341

 
521

 
364

Outfittery GMBH(1)(3)
 
Cash Exit Fee(2)(5)
 
8/10/2017
 

 
1,426

 
1,179

Rent the Runway, Inc.
 
Preferred Stock(2)
 
11/25/2015
 
88,037

 
213

 
282

 
 
Common Stock(2)
 
11/25/2015
 
149,203

 
1,081

 
859

 
 
 
 
 
 
237,240

 
1,294

 
1,141

Stance, Inc.
 
Preferred Stock
 
3/31/2017
 
75,000

 
41

 
70

Untuckit LLC
 
Cash Exit Fee(2)(5)
 
5/11/2018
 

 
39

 
57

Total E-Commerce - Clothing and Accessories - 0.69%*
 
 
 
 
 
485,581

 
3,321

 
2,811

 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Personal Goods
 
 
 
 
 
 
 
 
 
 
Enjoy Technology, Inc.
 
Preferred Stock
 
9/7/2018
 
336,304

 
269

 
323

Grove Collaborative, Inc.
 
Preferred Stock
 
4/2/2018
 
202,506

 
168

 
715

 
 
Preferred Stock
 
5/22/2019
 
109,114

 
228

 
233

 
 
 
 
 
 
311,620

 
396

 
948

Total E-Commerce - Personal Goods - 0.31%*
 
 
 
 
 
647,924

 
665

 
1,271

 
 
 
 
 
 
 
 
 
 
 
Educational/Training Software
 
 
 
 
 
 
 
 
 
 
Varsity Tutors LLC
 
Preferred Stock(2)(5)
 
3/13/2017
 
240,590

 
65

 
185

Total Educational/Training Software - 0.05%*
 
 
 
 
 
240,590

 
65

 
185

 
 
 
 
 
 
 
 
 
 
 
Entertainment
 
 
 
 
 
 
 
 
 
 
Mind Candy, Inc.(1)(3)
 
Preferred Stock
 
3/24/2017
 
278,209

 
922

 
214

Roli, Ltd.(1)(3)
 
Preferred Stock(2)
 
5/23/2018
 
102,247

 
644

 

Total Entertainment - 0.05%*
 
 
 
 
 
380,456

 
1,566

 
214

 
 
 
 
 
 
 
 
 
 
 
Financial Institution and Services
 
 
 
 
 
 
 
 
 
 
BlueVine Capital, Inc.
 
Preferred Stock
 
9/15/2017
 
271,293

 
361

 
909

Prodigy Investments Limited(1)(3)
 
Preferred Stock
 
12/5/2017
 
43,883

 
828

 
1,024

Revolut Ltd.(1)(3)
 
Preferred Stock(2)
 
4/16/2018
 
6,253

 
40

 
285

 
 
Preferred Stock(2)
 
10/29/2019
 
7,945

 
324

 
117

 
 
 
 
 
 
14,198

 
364

 
402

WorldRemit Group Limited(1)(3)
 
Preferred Stock(2)
 
12/23/2015
 
128,288

 
382

 
478

 
 
Preferred Stock(2)
 
12/23/2015
 
46,548

 
136

 
136

 
 
 
 
 
 
174,836

 
518

 
614

Total Financial Institution and Services - 0.73%*
 
 
 
 
 
504,210

 
2,071

 
2,949

 
 
 
 
 
 
 
 
 
 
 
Food & Drug
 
 
 
 
 
 
 
 
 
 
Capsule Corp.
 
Preferred Stock(2)
 
1/17/2020
 
135,022

 
254

 
254

 
 
Cash Exit Fee(2)(5)
 
12/28/2018
 

 
129

 
129

 
 
 
 
 
 
135,022

 
383

 
383

Freshly Inc.
 
Preferred Stock
 
10/7/2019
 
107,732

 
580

 
580

 
 
Preferred Stock
 
10/7/2019
 
31,299

 
109

 
109

 
 
 
 
 
 
139,031

 
689

 
689

Total Food & Drug - 0.26%*
 
 
 
 
 
274,053

 
1,072

 
1,072

 
 
 
 
 
 
 
 
 
 
 

11


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Warrant
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
General Media and Content
 
 
 
 
 
 
 
 
 
 
BZ Holdings, Inc. (fka TechMediaNetwork, Inc.)
 
Preferred Stock(2)
 
3/17/2014
 
72,234

 
$
31

 
$
68

Thrillist Media Group, Inc.
 
Common Stock(2)
 
9/24/2014
 
774,352

 
624

 
1,092

Total General Media and Content - 0.29%*
 
 
 
 
 
846,586

 
655

 
1,160

 
 
 
 
 
 
 
 
 
 
 
Healthcare Technology Systems
 
 
 
 
 
 
 
 
 
 
Curology, Inc.
 
Preferred Stock(2)
 
5/23/2019
 
36,020

 
58

 
58

Groop Internet Platfom, Inc.
 
Preferred Stock(2)
 
5/15/2019
 
50,881

 
128

 
38

Nurx Inc.
 
Preferred Stock
 
8/19/2019
 
136,573

 
216

 
216

Total Healthcare Technology Systems - 0.08%*
 
 
 
 
 
223,474

 
402

 
312

 
 
 
 
 
 
 
 
 
 
 
Household & Office Goods
 
 
 
 
 
 
 
 
 
 
Casper Sleep Inc.
 
Preferred Stock
 
3/1/2019
 
21,736

 
240

 
55

Total Household & Office Goods - 0.01%*
 
 
 
 
 
21,736

 
240

 
55

 
 
 
 
 
 
 
 
 
 
 
Human Resources/Recruitment
 
 
 
 
 
 
 
 
 
 
Hired, Inc.
 
Preferred Stock
 
9/21/2018
 
93,141

 
156

 
73

Total Human Resources/Recruitment - 0.02%*
 
 
 
 
 
93,141

 
156

 
73

 
 
 
 
 
 
 
 
 
 
 
Medical Software and Information Services
 
 
 
 
 
 
 
 
 
 
AirStrip Technologies, Inc.
 
Preferred Stock(2)
 
10/9/2013
 
8,036

 
112

 

Total Medical Software and Information Services - 0.00%*
 
 
 
8,036

 
112

 

 
 
 
 
 
 
 
 
 
 
 
Multimedia and Design Software
 
 
 
 
 
 
 
 
 
 
Pencil and Pixel, Inc.
 
Preferred Stock
 
2/28/2020
 
119,474

 
133

 
133

Total Multimedia and Design Software - 0.03%*
 
 
 
119,474

 
133

 
133

 
 
 
 
 
 
 
 
 
 
 
Network Systems Management Software
 
 
 
 
 
 
 
 
 
 
Cohesity, Inc.
 
Preferred Stock(2)
 
1/10/2020
 
18,945

 
54

 
54

Signifyd, Inc.
 
Preferred Stock(2)
 
12/19/2019
 
33,445

 
132

 
112

Total Network Systems Management Software - 0.04%*
 
 
 
 
52,390

 
186

 
166

 
 
 
 
 
 
 
 
 
 
 
Other Financial Services
 
 
 
 
 
 
 
 
 
 
Upgrade, Inc.
 
Preferred Stock
 
1/18/2019
 
744,225

 
223

 
193

Total Other Financial Services - 0.05%*
 
 
 
 
 
744,225

 
223

 
193

 
 
 
 
 
 
 
 
 
 
 
Real Estate Services
 
 
 
 
 
 
 
 
 
 
HomeLight, Inc.
 
Preferred Stock(2)
 
12/21/2018
 
54,004

 
44

 
124

Sonder Holdings Inc.
 
Preferred Stock
 
12/28/2018
 
136,511

 
232

 
613

 
 
Preferred Stock
 
3/4/2020
 
14,291

 
42

 
42

 
 
 
 
 
 
150,802

 
274

 
655

Total Real Estate Services - 0.19%*
 
 
 
 
 
204,806

 
318

 
779

 
 
 
 
 
 
 
 
 
 
 
Security Services
 
 
 
 
 
 
 
 
 
 
ForgeRock, Inc.
 
Preferred Stock
 
3/30/2016
 
195,992

 
155

 
110

 
 
Preferred Stock
 
3/30/2016
 
161,724

 
340

 
45

Total Security Services - 0.04%*
 
 
 
 
 
357,716

 
495

 
155

 
 
 
 
 
 
 
 
 
 
 
Shopping Facilitators
 
 
 
 
 
 
 
 
 
 
Moda Operandi, Inc.
 
Preferred Stock
 
9/27/2019
 
34,538

 
343

 
1,179

OfferUp Inc.
 
Preferred Stock(2)
 
12/23/2019
 
44,788

 
42

 
42

Total Shopping Facilitators - 0.30%*
 
 
 
 
 
79,326

 
385

 
1,221

 
 
 
 
 
 
 
 
 
 
 

12


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Warrant
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
Social/Platform Software
 
 
 
 
 
 
 
 
 
 
ClassPass, Inc.
 
Preferred Stock
 
3/18/2019
 
84,507

 
$
281

 
$
281

Total Social/Platform Software - 0.07%*
 
 
 
 
 
84,507

 
281

 
281

 
 
 
 
 
 
 
 
 
 
 
Transportation
 
 
 
 
 
 
 
 
 
 
Bird Rides, Inc.
 
Preferred Stock(2)
 
4/18/2019
 
68,111

 
193

 
221

Total Transportation - 0.05%*
 
 
 
 
 
68,111

 
193

 
221

 
 
 
 
 
 
 
 
 
 
 
Travel & Leisure
 
 
 
 
 
 
 
 
 
 
GoEuro Corp.(1)(3)
 
Preferred Units
 
3/26/2018
 
12,027

 
362

 
289

Inspirato, LLC
 
Preferred Units(2)
 
4/25/2013
 
1,994

 
37

 
45

Total Travel & Leisure - 0.08%*
 
 
 
 
 
14,021

 
399

 
334

 
 
 
 
 
 
 
 
 
 
 
Total Warrant Investments - 5.18%*
 
 
 
 
 
 
 
$
18,993

 
$
20,996


13


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Equity
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
Equity Investments(8)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Applications Software
 
 
 
 
 
 
 
 
 
 
Convoy, Inc.
 
Preferred Stock(2)
 
9/27/2018
 
35,208

 
$
250

 
$
356

Medallia, Inc.
 
Common Stock(2)(10)
 
11/13/2014
 
48,616

 
11

 
1,227

Passport Labs, Inc.
 
Preferred Stock(2)
 
6/11/2019
 
1,302

 
100

 
103

Total Business Applications Software - 0.42%*
 
 
 
 
 
85,126

 
361

 
1,686

 
 
 
 
 
 
 
 
 
 
 
Communications Software
 
 
 
 
 
 
 
 
 
 
Pluribus Networks, Inc.
 
Preferred Stock(2)
 
1/10/2017
 
722,073

 
2,000

 
2,000

Total Communications Software - 0.49%*
 
 
 
 
 
722,073

 
2,000

 
2,000

 
 
 
 
 
 
 
 
 
 
 
Consumer Non-Durables
 
 
 
 
 
 
 
 
 
 
Hims, Inc.
 
Preferred Stock(2)
 
4/29/2019
 
144,092

 
500

 
493

Total Consumer Non-Durables - 0.12%*
 
 
 
 
 
144,092

 
500

 
493

 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Clothing and Accessories
 
 
 
 
 
 
 
 
 
 
FabFitFun, Inc.
 
Preferred Stock(2)
 
1/17/2019
 
67,934

 
500

 
611

Total E-Commerce - Clothing and Accessories - 0.15%*
 
 
 
 
 
67,934

 
500

 
611

 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Personal Goods
 
 
 
 
 
 
 
 
 
 
Grove Collaborative, Inc.
 
Preferred Stock(2)
 
6/5/2018
 
134,249

 
500

 
773

Total E-Commerce - Personal Goods - 0.19%*
 
 
 
 
 
134,249

 
500

 
773

 
 
 
 
 
 
 
 
 
 
 
Educational/Training Software
 
 
 
 
 
 
 
 
 
 
Varsity Tutors LLC
 
Preferred Stock(2)
 
1/5/2018
 
92,470

 
250

 
256

Total Educational/Training Software - 0.06%*
 
 
 
 
 
92,470

 
250

 
256

 
 
 
 
 
 
 
 
 
 
 
Entertainment
 
 
 
 
 
 
 
 
 
 
Mind Candy, Inc.(1)(3)
 
Preferred Stock(2)
 
3/9/2020
 
511,665

 
1,000

 
1,003

Total Entertainment - 0.25%*
 
 
 
 
 
511,665

 
1,000

 
1,003

 
 
 
 
 
 
 
 
 
 
 
Financial Institution and Services
 
 
 
 
 
 
 
 
 
 
GoGreenHost AB(1)(3)
 
Preferred Stock(2)
 
12/1/2017
 
1

 
2,134

 
1,168

Revolut Ltd.(1)(3)
 
Preferred Stock(2)
 
8/3/2017
 
25,920

 
292

 
1,447

Total Financial Institution and Services - 0.64%*
 
 
 
 
 
25,921

 
2,426

 
2,615

 
 
 
 
 
 
 
 
 
 
 
Food & Drug
 
 
 
 
 
 
 
 
 
 
Capsule Corp.
 
Preferred Stock(2)
 
7/25/2019
 
75,013

 
500

 
500

Total Food & Drug - 0.12%*
 
 
 
 
 
75,013

 
500

 
500

 
 
 
 
 
 
 
 
 
 
 
Healthcare Technology Systems
 
 
 
 
 
 
 
 
 
 
Curology, Inc.
 
Preferred Stock(2)
 
11/26/2019
 
66,000

 
196

 
238

 
 
Common Stock(2)
 
1/14/2020
 
142,855

 
404

 
320

 
 
 
 
 
 
208,855

 
600

 
558

Groop Internet Platfom, Inc.
 
Preferred Stock(2)
 
5/15/2019
 
90,859

 
250

 
250

Nurx Inc.
 
Preferred Stock(2)
 
5/31/2019
 
136,572

 
1,000

 
1,004

Total Healthcare Technology Systems - 0.45%*
 
 
 
 
 
436,286

 
1,850

 
1,812

 
 
 
 
 
 
 
 
 
 
 
Household & Office Goods
 
 
 
 
 
 
 
 
 
 
Casper Sleep Inc.
 
Common Stock(2)(10)
 
6/19/2017
 
35,722

 
1,000

 
308

Total Household & Office Goods - 0.08%*
 
 
 
 
 
35,722

 
1,000

 
308

 
 
 
 
 
 
 
 
 
 
 

14


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of June 30, 2020
Venture Growth Stage Company
 
Type of Equity
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
Network Systems Management Software
 
 
 
 
 
 
 
 
 
 
Cohesity, Inc.
 
Preferred Stock(2)
 
3/24/2017
 
60,342

 
$
400

 
$
606

 
 
Preferred Stock(2)
 
4/7/2020
 
9,022

 
125

 
125

Total Network Systems Management Software - 0.18%*
 
 
 
 
69,364

 
525

 
731

 
 
 
 
 
 
 
 
 
 
 
Real Estate Services
 
 
 
 
 
 
 
 
 
 
Sonder Holdings Inc.(1)
 
Preferred Stock(2)
 
5/17/2019
 
29,773

 
312

 
312

Total Real Estate Services - 0.08%*
 
 
 
 
 
29,773

 
312

 
312

 
 
 
 
 
 
 
 
 
 
 
Security Services
 
 
 
 
 
 
 
 
 
 
CrowdStrike, Inc.
 
Common Stock(2)(10)
 
10/13/2017
 
56,747

 
323

 
5,691

Total Security Services - 1.40%*
 
 
 
 
 
56,747

 
323

 
5,691

 
 
 
 
 
 
 
 
 
 
 
Travel & Leisure
 
 
 
 
 
 
 
 
 
 
GoEuro Corp.(1)(3)
 
Preferred Stock(2)
 
10/5/2017
 
2,362

 
300

 
267

Inspirato, LLC
 
Preferred Units(2)(4)
 
9/11/2014
 
1,948

 
250

 
266

Total Travel & Leisure - 0.13%*
 
 
 
 
 
4,310

 
550

 
533

 
 
 
 
 
 
 
 
 
 
 
Total Equity Investments - 4.77%*
 
 
 
 
 
 
 
$
12,597

 
$
19,324

 
 
 
 
 
 
 
 
 
 
 
Total Investments in Portfolio Companies - 170.85%*(11)
 
 
 
 
 
$
708,540

 
$
692,853

 
 
 
 
 
 
 
 
 
 
 
Total Investments - 170.85%*(9)
 
 
 
 
 
 
 
$
708,540

 
$
692,853

_______________
(1)
Investment is a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). As of June 30, 2020 non-qualifying assets represented 22.4% of the Company’s total assets, at fair value.
(2)
As of June 30, 2020, this investment was not pledged as collateral as part of the Company’s revolving credit facility.
(3)
Entity is not domiciled in the United States and does not have its principal place of business in the United States.
(4)
Investment is owned by TPVG Investment LLC, a wholly owned taxable subsidiary of the Company.
(5)
Investment is a cash success fee or a cash exit fee payable on the consummation of certain trigger events.
(6)
Gross unrealized gains, gross unrealized losses, and net unrealized losses for federal income tax purposes totaled $15.8 million, $31.5 million, and $15.7 million, respectively, for the June 30, 2020 investment portfolio. The tax cost of investments is $708.5 million.
(7)
Debt is on non-accrual status at June 30, 2020 and is therefore considered non-income producing. Non-accrual investments at June 30, 2020 had a total cost and fair value of $31.8 million and $16.5 million, respectively.
(8)
Non-income producing investments.
(9)
Except for equity in three public companies, all investments were valued at fair value using Level 3 significant unobservable inputs as determined in good faith by the Company’s board of directors (the “Board”).
(10)
Investment is publicly traded and listed on New York Stock Exchange or NASDAQ.
(11)
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.
(12)
Acquisition date represents the date of the investment in the portfolio investment.
*
Value as a percentage of net assets.

15


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Biofuels / Biomass
 
 
 
 
 
 
 
 
 
 
 
 
Harvest Power, Inc.(7)
 
Growth Capital Loan (7.00% interest rate, 9.00% EOT payment)
 
3/5/2014
 
$
10,880

 
$
12,385

 
$
1,797

 
4/30/2021
Total Biofuels / Biomass - 0.54%*
 
 
 
10,880

 
12,385

 
1,797

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Buildings and Property
 
 
 
 
 
 
 
 
 
 
 
 
Knotel, Inc.
 
Growth Capital Loan (Prime + 4.25% interest rate, 9.00% EOT payment)
 
2/28/2019
 
9,000

 
9,102

 
9,102

 
8/31/2022
 
 
Growth Capital Loan (Prime + 4.25% interest rate, 9.00% EOT payment)
 
3/25/2019
 
6,000

 
6,054

 
6,054

 
9/30/2022
 
 
Growth Capital Loan (Prime + 4.25% interest rate, 9.00% EOT payment)
 
4/18/2019
 
9,000

 
9,060

 
9,060

 
10/31/2022
 
 
Growth Capital Loan (Prime + 4.25% interest rate, 9.00% EOT payment)
 
9/30/2019
 
6,000

 
5,955

 
5,955

 
3/31/2023
Total Buildings and Property - 9.07%*
 
 
 
30,000

 
30,171

 
30,171

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Applications Software
 
 
 
 
 


 


 


 
 
HI.Q, Inc.
 
Growth Capital Loan (11.00% interest rate, 2.00% EOT payment)
 
12/17/2018
 
13,250

 
13,119

 
13,119

 
6/30/2023
OneSource Virtual, Inc.
 
Growth Capital Loan (Prime + 3.50% interest rate, 2.00% EOT payment)
 
6/29/2018
 
10,000

 
10,475

 
10,533

 
6/30/2022
 
 
Growth Capital Loan (Prime + 0.75% interest rate, 0.25% EOT payment)
 
11/5/2019
 
5,000

 
4,957

 
4,961

 
2/29/2020
 
 
 
 
 
 
15,000

 
15,432

 
15,494

 
 
Passport Labs, Inc.
 
Growth Capital Loan (9.75% interest rate, 5.25% EOT payment)
 
10/11/2018
 
19,000

 
18,923

 
18,923

 
8/31/2023
 
 
Growth Capital Loan (10.25% interest rate, 5.25% EOT payment)
 
5/15/2019
 
6,000

 
5,921

 
5,921

 
3/31/2024
 
 
Growth Capital Loan (11.00% interest rate, 8.00% EOT payment)
 
5/15/2019
 
5,000

 
4,952

 
4,952

 
5/31/2024
 
 
 
 
 
 
30,000

 
29,796

 
29,796

 
 
Quantcast Corporation
 
Growth Capital Loan (Prime + 6.25% interest rate, 6.00% EOT payment)
 
3/12/2018
 
9,780

 
10,303

 
10,330

 
3/31/2021
Total Business Applications Software - 20.67%*
 
 
 
68,030

 
68,650

 
68,739

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business to Business Marketplace
 
 
 
 
 
 
 
 
 
 
Adjust GmbH(1)(3)
 
Growth Capital Loan (Prime + 4.75% interest rate, 2.50% PIK interest rate)
 
1/29/2019
 
20,473

 
20,199

 
20,324

 
1/31/2022
 
 
Growth Capital Loan (Prime + 4.75% interest rate, 2.50% PIK interest rate)
 
1/18/2019
 
8,195

 
8,087

 
8,137

 
1/31/2022
 
 
 
 
 
 
28,668

 
28,286

 
28,461

 
 
Factual, Inc.
 
Growth Capital Loan (Prime + 6.25% interest rate, 7.75% EOT payment)
 
12/23/2019
 
10,000

 
9,822

 
9,822

 
12/31/2022
Total Business to Business Marketplace - 11.51%*
 
 
 
38,668

 
38,108

 
38,283

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Services
 
 
 
 
 
 
 
 
 
 
 
 
Transfix, Inc.
 
Growth Capital Loan (Prime + 5.00% interest rate, 2.00% EOT payment)
 
12/23/2019
 
10,000

 
9,810

 
9,810

 
12/31/2021
Total Commercial Services - 2.95%*
 
 
 
10,000

 
9,810

 
9,810

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Non-Durables
 
 
 
 
 
 
 
 
 
 
 
 
Imperfect Foods, Inc.
 
Growth Capital Loan (Prime + 4.10% interest rate, 5.35% EOT payment)
 
10/11/2019
 
10,000

 
9,767

 
9,767

 
4/30/2023
Total Consumer Non-Durables - 2.94%*
 
 
 
10,000

 
9,767

 
9,767

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

16


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Products and Services
 
 
 
 
 
 
 
 
 
 
Clutter, Inc.
 
Growth Capital Loan (Prime + 3.00% interest rate, 4.00% EOT payment)
 
10/30/2018
 
$
6,303

 
$
6,360

 
$
6,383

 
10/31/2020
 
 
Growth Capital Loan (Prime + 4.50% interest rate, 4.00% EOT payment)
 
10/30/2018
 
5,000

 
5,002

 
5,025

 
10/31/2021
 
 
Growth Capital Loan (Prime + 3.00% interest rate, 4.00% EOT payment)
 
12/27/2018
 
1,391

 
1,396

 
1,402

 
12/31/2020
 
 
Growth Capital Loan (Prime + 4.50% interest rate, 4.00% EOT payment)
 
2/1/2019
 
1,932

 
1,920

 
1,930

 
1/31/2022
 
 
 
 
 
 
14,626

 
14,678

 
14,740

 
 
Outdoor Voices, Inc.
 
Growth Capital Loan (Prime + 5.00% interest rate, 9.75% EOT payment)
 
2/26/2019
 
4,000

 
3,990

 
3,990

 
2/28/2022
 
 
Growth Capital Loan (Prime + 5.00% interest rate, 9.75% EOT payment)
 
4/4/2019
 
6,000

 
5,957

 
5,957

 
4/30/2022
 
 
 
 
 
 
10,000

 
9,947

 
9,947

 
 
Quip NYC, Inc.
 
Growth Capital Loan (Prime + 6.75% interest rate, 6.25% EOT payment)
 
4/16/2019
 
10,000

 
9,895

 
9,895

 
4/30/2022
 
 
Growth Capital Loan (Prime + 6.75% interest rate, 6.25% EOT payment)
 
6/26/2019
 
5,000

 
4,923

 
4,923

 
6/30/2022
 
 
Growth Capital Loan (Prime + 6.75% interest rate, 6.25% EOT payment)
 
6/26/2019
 
5,000

 
4,923

 
4,923

 
6/30/2022
 
 
Growth Capital Loan (Prime + 6.75% interest rate, 6.25% EOT payment)
 
9/26/2019
 
5,000

 
4,891

 
4,891

 
9/30/2022
 
 
 
 
 
 
25,000

 
24,632

 
24,632

 
 
Total Consumer Products and Services - 14.83%*
 
 
 
49,626

 
49,257

 
49,319

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Retail
 
 
 
 
 
 
 
 
 
 
 
 
LovePop, Inc.
 
Growth Capital Loan (Prime + 4.75% interest rate, 6.75% EOT payment)
 
11/5/2018
 
10,000

 
10,088

 
10,030

 
11/30/2021
Total Consumer Retail - 3.02%*
 
 
 
10,000

 
10,088

 
10,030

 
 
 
 
 
 
 
 


 


 


 
 
Database Software
 
 
 
 
 
 
 
 
 
 
 
 
Qubole Inc.
 
Growth Capital Loan (Prime + 6.00% interest rate, 6.75% EOT payment)
 
12/27/2019
 
10,000

 
9,846

 
9,846

 
12/31/2023
 
 
Growth Capital Loan (Prime + 6.00% interest rate, 6.75% EOT payment)
 
12/27/2019
 
5,000

 
4,923

 
4,923

 
12/31/2023
Total Database Software - 4.44%*
 
 
 
15,000

 
14,769

 
14,769

 
 
 
 
 
 
 
 


 


 


 
 
E-Commerce - Clothing and Accessories
 
 
 
 
 
 
 
 
 
 
FabFitFun, Inc.
 
Growth Capital Loan (10.50% interest rate, 6.00% EOT payment)
 
2/26/2018
 
3,957

 
4,125

 
4,135

 
2/28/2021
 
 
Growth Capital Loan (Prime + 6.50% interest rate, 6.50% EOT payment)
 
11/19/2019
 
5,000

 
4,848

 
4,892

 
11/30/2022
 
 
Growth Capital Loan (Prime + 6.50% interest rate, 6.50% EOT payment)
 
11/19/2019
 
5,000

 
4,848

 
4,892

 
11/30/2022
 
 
Growth Capital Loan (Prime + 6.50% interest rate, 6.50% EOT payment)
 
11/19/2019
 
5,000

 
4,848

 
4,892

 
11/30/2022
 
 
 
 
 
 
18,957

 
18,669

 
18,811

 
 
Outfittery GMBH(1)(3)
 
Growth Capital Loan (Prime + 8.25% interest rate, 11.00% EOT payment)(2)
 
8/11/2017
 
6,925

 
7,080

 
6,684

 
8/31/2022
 
 
Growth Capital Loan (12.00% interest rate, 9.00% EOT payment)(2)
 
6/7/2018
 
2,360

 
2,399

 
2,281

 
6/30/2021
 
 
Growth Capital Loan (12.75% interest rate, 9.00% EOT payment)(2)
 
12/28/2018
 
2,294

 
2,254

 
2,204

 
12/31/2021
 
 
Growth Capital Loan (Prime + 7.25% interest rate, 9.00% EOT payment)(2)
 
8/7/2019
 
3,947

 
3,748

 
3,727

 
8/31/2022
 
 
Growth Capital Loan (Prime + 7.25% interest rate, 9.00% EOT payment)(2)
 
9/23/2019
 
3,305

 
2,969

 
3,023

 
9/30/2022
 
 
 
 
 
 
18,831

 
18,450

 
17,919

 
 

17


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Stance, Inc.
 
Growth Capital Loan (Prime + 4.50% interest rate, 5.50% EOT payment)
 
11/1/2018
 
$
2,000

 
$
2,078

 
$
2,081

 
4/30/2020
Total E-Commerce - Clothing and Accessories - 11.67%*
 
 
 
39,788

 
39,197

 
38,811

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Personal Goods
 
 
 
 
 
 
 
 
 
 
 
 
Enjoy Technology, Inc.
 
Growth Capital Loan (Prime + 5.25% interest rate, 5.50% EOT payment)
 
9/28/2018
 
10,000

 
10,056

 
10,056

 
9/30/2021
Grove Collaborative, Inc.
 
Growth Capital Loan (Prime + 1.25% interest rate, 1.25% EOT payment)
 
12/31/2019
 
2,750

 
2,709

 
2,709

 
6/30/2020
Total E-Commerce - Personal Goods - 3.84%*
 
 
 
12,750

 
12,765

 
12,765

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
Mind Candy Limited(1)(3)
 
Growth Capital Loan (11.00% PIK, 3.00% Cash, 9.50% EOT payment)
 
6/25/2014
 
12,746

 
12,596

 
11,186

 
6/30/2022
Roli, Ltd.(1)(3)(7)
 
Growth Capital Loan (11.00% interest rate, 9.50% EOT payment)(2)
 
5/23/2018
 
10,732

 
10,767

 
9,291

 
5/31/2021
 
 
Growth Capital Loan (11.00% interest rate, 9.50% EOT payment)(2)
 
5/23/2018
 
1,341

 
1,346

 
1,162

 
5/31/2021
 
 
Growth Capital Loan (11.25% interest rate, 9.50% EOT payment)(2)
 
7/16/2018
 
1,325

 
1,317

 
1,162

 
7/31/2021
 
 
Revolver (Prime + 3.25% interest rate, 5.00% EOT payment)(2)
 
7/5/2018
 
129

 
129

 
102

 
10/31/2020
 
 
Revolver (Prime + 4.25% interest rate, 5.00% EOT payment)(2)
 
7/5/2018
 
1,898

 
1,898

 
1,682

 
10/31/2020
 
 
Revolver (Prime + 4.25% interest rate, 5.00% EOT payment)(2)
 
9/27/2018
 
4,556

 
4,556

 
3,704

 
10/31/2020
 
 
Growth Capital Loan (10.00% PIK interest rate, 10.00% EOT payment)(2)
 
6/5/2019
 
1,283

 
1,340

 
1,243

 
10/31/2020
 
 
Growth Capital Loan (10.00% PIK interest rate, 20.00% EOT payment)(2)
 
7/9/2019
 
627

 
627

 
651

 
10/31/2020
 
 
Growth Capital Loan (10.00% PIK interest rate, 20.00% EOT payment)(2)
 
8/28/2019
 
538

 
538

 
567

 
10/31/2020
 
 
Growth Capital Loan (10.00% PIK interest rate)(2)
 
10/24/2019
 
4,141

 
4,141

 
3,392

 
10/31/2020
 
 
 
 
 
 
26,570

 
26,659

 
22,956

 
 
Total Entertainment - 10.27%*
 
 
 
 
 
39,316

 
39,255

 
34,142

 
 
 
 
 
 
 
 


 


 


 
 
Financial Institution and Services
 
 
 
 
 
 
 
 
 
 
Prodigy Finance Limited(1)(3)
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
12/5/2017
 
18,000

 
18,918

 
18,918

 
12/31/2020
 
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
3/7/2018
 
2,200

 
2,286

 
2,286

 
3/31/2021
 
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
7/31/2018
 
3,300

 
3,377

 
3,377

 
7/31/2021
 
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
8/8/2018
 
2,500

 
2,553

 
2,553

 
8/31/2021
 
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
9/5/2018
 
1,500

 
1,527

 
1,527

 
9/30/2021
 
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
9/5/2018
 
2,500

 
2,545

 
2,545

 
9/30/2021
 
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
11/15/2018
 
6,000

 
6,063

 
6,063

 
11/30/2021
 
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
12/6/2018
 
4,000

 
4,028

 
4,028

 
12/31/2021
 
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
4/30/2019
 
133

 
132

 
132

 
4/30/2022
 
 
Growth Capital Loan (Prime + 7.75% interest rate, 10.00% EOT payment)
 
8/6/2019
 
267

 
262

 
262

 
8/31/2022
Total Financial Institution and Services - 12.54%*
 
 
 
40,400

 
41,691

 
41,691

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

18


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Food & Drug
 
 
 
 
 
 
 
 
 
 
 
 
Freshly Inc.
 
Growth Capital Loan (Prime + 6.50% interest rate, 5.00% EOT payment)
 
10/9/2019
 
$
6,000

 
$
5,703

 
$
5,703

 
10/31/2022
 
 
Growth Capital Loan (Prime + 4.50% interest rate, 6.75% EOT payment)
 
12/30/2019
 
3,000

 
2,833

 
2,833

 
12/31/2022
 
 
Growth Capital Loan (Prime + 6.00% interest rate, 6.50% EOT payment)
 
12/30/2019
 
3,000

 
2,833

 
2,833

 
6/30/2022
Total Food & Drug - 3.42%*
 
 
 
12,000

 
11,369

 
11,369

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Technology Systems
 
 
 
 
 
 
 
 
 
 
 
 
Nurx Inc.
 
Growth Capital Loan (Prime + 4.50% interest rate, 7.75% EOT payment)
 
11/5/2019
 
20,000

 
19,669

 
19,669

 
11/30/2023
Total Healthcare Technology Systems - 5.92%*
 
 
 
20,000

 
19,669

 
19,669

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Household & Office Goods
 
 
 
 
 
 
 
 
 
 
 
 
Brooklinen, Inc.
 
Growth Capital Loan (Prime + 6.50% interest rate, 7.75% EOT payment)
 
11/5/2019
 
2,000

 
1,848

 
1,848

 
11/30/2022
Casper Sleep Inc.
 
Growth Capital Loan (Prime + 7.25% interest rate, 7.50% EOT payment)
 
8/9/2019
 
15,000

 
14,798

 
14,798

 
8/31/2023
 
 
Growth Capital Loan (Prime + 6.00% interest rate, 6.25% EOT payment)
 
11/1/2019
 
15,000

 
14,749

 
14,749

 
10/31/2022
 
 
 
 
 
 
30,000

 
29,547

 
29,547

 
 
Total Household & Office Goods - 9.44%*
 
 
 
32,000

 
31,395

 
31,395

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Human Resources/Recruitment
 
 
 
 
 
 
 
 
 
 
 
 
Hired, Inc.
 
Growth Capital Loan (Prime + 5.00% interest rate, 6.00% EOT payment)
 
3/6/2019
 
5,000

 
4,981

 
4,946

 
9/30/2022
 
 
Growth Capital Loan (Prime + 6.50% interest rate, 7.25% EOT payment)
 
3/6/2019
 
5,000

 
4,983

 
4,940

 
3/31/2022
Total Human Resources/Recruitment - 2.97%*
 
 
 
10,000

 
9,964

 
9,886

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Network Systems Management Software
 
 
 
 
 
 
 
 
 
 
Virtual Instruments Corporation
 
Growth Capital Loan (10.00% interest rate)
 
4/4/2016
 
5,000

 
5,000

 
5,120

 
4/4/2020
 
 
Growth Capital Loan (5.00% PIK interest rate)
 
8/7/2018
 
30,441

 
30,441

 
28,386

 
4/4/2021
Total Network Systems Management Software - 10.08%*
 
 
 
35,441

 
35,441

 
33,506

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Financial Services
 
 
 
 
 
 
 
 
 
 
 
 
Upgrade, Inc.
 
Growth Capital Loan (9.50% interest rate, 8.50% EOT payment)
 
1/18/2019
 
6,000

 
6,033

 
6,033

 
1/31/2023
 
 
Growth Capital Loan (11.00% interest rate, 8.50% EOT payment)
 
1/18/2019
 
1,522

 
1,528

 
1,528

 
1/31/2023
 
 
Growth Capital Loan (8.50% interest rate, 2.75% EOT payment)
 
1/18/2019
 
6,391

 
6,540

 
6,540

 
1/31/2020
 
 
Growth Capital Loan (9.50% interest rate, 6.25% EOT payment)
 
3/1/2019
 
6,087

 
6,131

 
6,131

 
2/28/2022
Total Other Financial Services - 6.08%*
 
 
 
20,000

 
20,232

 
20,232

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate Services
 
 
 
 
 
 
 
 
 
 
 
 
HomeLight, Inc.
 
Growth Capital Loan (13.00% interest rate)
 
4/16/2019
 
2,000

 
1,969

 
1,983

 
4/30/2022
Sonder USA, Inc.
 
Growth Capital Loan (Prime + 5.75% interest rate, 5.25% EOT payment)
 
12/28/2018
 
20,000

 
20,044

 
20,044

 
6/30/2022
Total Real Estate Services - 6.62%*
 
 
 
22,000

 
22,013

 
22,027

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restaurant / Food Service
 
 
 
 
 
 
 
 
 
 
 
 
Munchery, Inc.(7)
 
Growth Capital Loan (Prime + 8.25% interest rate, 8.75% EOT payment)
 
6/30/2016
 
2,589

 
2,729

 
1,435

 
6/30/2019
 
 
Growth Capital Loan (Prime + 8.25% interest rate)(2)
 
4/25/2018
 
300

 
300

 
158

 
6/30/2019
Total Restaurant / Food Service - 0.48%*
 
 
 
2,889

 
3,029

 
1,593

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

19


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Investment
 
Acquisition
Date(12)
 
Outstanding
Principal
 
Cost(6)
 
Fair Value
 
Maturity
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
Security Services
 
 
 
 
 
 
 
 
 
 
 
 
ForgeRock, Inc.
 
Growth Capital Loan (Prime + 3.75% interest rate, 8.50% EOT payment)
 
8/15/2016
 
$
370

 
$
784

 
$
784

 
2/29/2020
 
 
Growth Capital Loan (Prime + 2.90% interest rate, 8.00% EOT payment)
 
3/27/2019
 
10,000

 
9,975

 
9,975

 
9/30/2022
 
 
Growth Capital Loan (Prime + 3.70% interest rate, 8.00% EOT payment)
 
9/30/2019
 
10,000

 
9,852

 
9,852

 
12/31/2022
 
 
Growth Capital Loan (Prime + 4.50% interest rate, 8.00% EOT payment)
 
12/23/2019
 
10,000

 
9,794

 
9,794

 
12/31/2022
Total Security Services - 9.14%*
 
 
 
30,370

 
30,405

 
30,405

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shopping Facilitators
 
 
 
 
 
 
 
 
 
 
 
 
Moda Operandi, Inc.
 
Growth Capital Loan (Prime + 6.25% interest rate, 7.25% EOT payment)
 
10/21/2019
 
10,000

 
9,825

 
9,825

 
4/30/2022
 
 
Growth Capital Loan (Prime + 6.25% interest rate, 7.25% EOT payment)
 
11/27/2019
 
5,000

 
4,897

 
4,897

 
5/31/2022
Total Shopping Facilitators - 4.43%*
 
 
 
15,000

 
14,722

 
14,722

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Social/Platform Software
 
 
 
 
 
 
 
 
 
 
 
 
ClassPass, Inc.
 
Growth Capital Loan (Prime + 5.00% interest rate, 8.25% EOT payment)
 
8/15/2019
 
15,000

 
14,851

 
15,005

 
8/31/2023
 
 
Growth Capital Loan (Prime + 5.00% interest rate, 8.25% EOT payment)
 
9/30/2019
 
15,000

 
14,805

 
14,962

 
9/30/2023
Total Social/Platform Software - 9.01%*
 
 
 
30,000

 
29,656

 
29,967

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Travel & Leisure
 
 
 
 
 
 
 
 
 
 
 
 
GoEuro Corp.(1)
 
Growth Capital Loan (10.25% interest rate, 4.00% EOT payment)
 
10/30/2019
 
20,000

 
19,465

 
19,465

 
10/31/2022
Total Travel & Leisure - 5.85%*
 
 
 
 
 
20,000

 
19,465

 
19,465

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wireless Communications Equipment
 
 
 
 
 
 
 
 
 
 
Cambridge Broadband Network Limited(1)(3)(7)
 
Growth Capital Loan (Prime + 11.75% interest rate)
 
9/3/2014
 
6,701

 
6,701

 

 
12/31/2021
 
 
Growth Capital Loan (12.00% PIK interest rate)(2)
 
3/5/2019
 
375

 
375

 
94

 
12/31/2019
 
 
Growth Capital Loan (12.00% PIK interest rate)(2)
 
4/4/2019
 
375

 
375

 
94

 
12/31/2019
Total Wireless Communications Equipment - 0.06%*
 
 
 
7,451

 
7,451

 
188

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt Investments - 181.81%*
 
 
 
$
631,609

 
$
630,724

 
$
604,518

 
 

20


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Warrant
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
Warrant Investments(8)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advertising / Marketing
 
 
 
 
 
 
 
 
 
 
InMobi Pte Ltd.(1)(2)(3)
 
Ordinary Shares
 
12/13/2013
 
48,500

 
$
35

 
$
148

Total Advertising / Marketing - 0.04%*
 
 
 
 
 
48,500

 
35

 
148

 
 
 
 
 
 
 
 
 
 
 
Building Materials/Construction Machinery
 
 
 
 
 
 
 
 
 
 
View, Inc.
 
Preferred Stock
 
6/13/2017
 
4,545,455

 
500

 
500

Total Building Materials/Construction Machinery - 0.15%*
 
 
 
4,545,455

 
500

 
500

 
 
 
 
 
 
 
 
 
 
 
Buildings and Property
 
 
 
 
 
 
 
 
 
 
Knotel, Inc.
 
Preferred Stock
 
2/19/2019
 
360,260

 
159

 
288

Total Buildings and Property - 0.09%*
 
 
 
 
 
360,260

 
159

 
288

 
 
 
 
 
 
 
 
 
 
 
Business Applications Software
 
 
 
 
 
 
 
 
 
 
FinancialForce.com, Inc.
 
Preferred Stock
 
6/20/2016
 
547,440

 
1,540

 
2,696

HI.Q, Inc.
 
Preferred Stock
 
12/17/2018
 
606,952

 
196

 
437

OneSource Virtual, Inc.
 
Preferred Stock
 
6/25/2018
 
58,977

 
134

 
185

Passport Labs, Inc.
 
Preferred Stock
 
9/28/2018
 
21,929

 
303

 
518

Quantcast Corporation(5)
 
Cash Exit Fee
 
8/9/2018
 

 
213

 
188

Toast, Inc.(2)
 
Preferred Stock
 
2/1/2018
 
26,325

 
27

 
269

Total Business Applications Software - 1.29%*
 
 
 
 
 
1,261,623

 
2,413

 
4,293

 
 
 
 
 
 
 
 
 
 
 
Business to Business Marketplace
 
 
 
 
 
 
 
 
 
 
Factual, Inc.
 
Preferred Stock
 
9/4/2018
 
47,072

 
86

 
73

Optoro, Inc.(2)
 
Preferred Stock
 
7/13/2015
 
10,346

 
40

 
37

RetailNext, Inc.
 
Preferred Stock
 
11/16/2017
 
123,420

 
80

 
111

Total Business to Business Marketplace - 0.07%*
 
 
 
 
 
180,838

 
206

 
221

 
 
 
 
 
 
 
 
 
 
 
Commercial Services
 
 
 
 
 
 
 
 
 
 
Transfix, Inc.
 
Preferred Stock
 
5/31/2019
 
133,502

 
188

 
188

Total Commercial Services - 0.06%*
 
 
 
 
 
133,502

 
188

 
188

 
 
 
 
 
 
 
 
 
 
 
Conferencing Equipment / Services
 
 
 
 
 
 
 
 
 
 
Fuze, Inc. (fka Thinking Phone Networks, Inc.)(2)
 
Preferred Stock
 
9/29/2015
 
323,381

 
670

 
205

Total Conferencing Equipment / Services - 0.06%*
 
 
 
 
 
323,381

 
670

 
205

 
 
 
 
 
 
 
 
 
 
 
Consumer Non-Durables
 
 
 
 
 
 
 
 
 
 
Hims, Inc.(2)
 
Preferred Stock
 
11/27/2019
 
198,126

 
73

 
73

Imperfect Foods, Inc.
 
Preferred Stock
 
6/6/2019
 
43,746

 
189

 
280

Total Consumer Non-Durables - 0.11%*
 
 
 
 
 
241,872

 
262

 
353

 
 
 
 
 
 
 
 
 
 
 
Consumer Products and Services
 
 
 
 
 
 
 
 
 
 
Clutter, Inc.
 
Preferred Stock
 
10/18/2018
 
77,434

 
363

 
530

Outdoor Voices, Inc.
 
Common Stock
 
2/26/2019
 
255,000

 
360

 
360

Quip NYC, Inc.
 
Preferred Stock
 
11/26/2018
 
41,272

 
455

 
455

Total Consumer Products and Services - 0.40%*
 
 
 
 
 
373,706

 
1,178

 
1,345

 
 
 
 
 
 
 
 
 
 
 
Consumer Retail
 
 
 
 
 
 
 
 
 
 
LovePop, Inc.
 
Preferred Stock
 
10/23/2018
 
163,463

 
168

 
128

Total Consumer Retail - 0.04%*
 
 
 
 
 
163,463

 
168

 
128

 
 
 
 
 
 
 
 
 
 
 
Database Software
 
 
 
 
 

 

 

Qubole Inc.
 
Preferred Stock
 
11/21/2018
 
265,266

 
122

 
122

Total Database Software - 0.04%*
 
 
 
 
 
265,266

 
122

 
122

 
 
 
 
 
 
 
 
 
 
 

21


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Warrant
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Clothing and Accessories
 
 
 
 
 
 
 
 
 
 
FabFitFun, Inc.
 
Preferred Stock
 
11/20/2017
 
173,341

 
$
521

 
$
364

Outfittery GMBH(1)(2)(3)(5)
 
Cash Exit Fee
 
8/10/2017
 

 
1,170

 
942

Rent the Runway, Inc.
 
Preferred Stock
 
11/25/2015
 
88,037

 
213

 
428

 
 
Common Stock
 
11/25/2015
 
149,203

 
1,081

 
1,277

 
 
 
 
 
 
237,240

 
1,294

 
1,705

Stance, Inc.
 
Preferred Stock
 
3/31/2017
 
75,000

 
41

 
70

Untuckit LLC(5)
 
Cash Exit Fee
 
5/11/2018
 

 
39

 
52

Total E-Commerce - Clothing and Accessories - 0.94%*
 
 
 
 
 
485,581

 
3,065

 
3,133

 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Personal Goods
 
 
 
 
 
 
 
 
 
 
Enjoy Technology, Inc.
 
Preferred Stock
 
9/7/2018
 
336,304

 
269

 
424

Grove Collaborative, Inc.
 
Preferred Stock
 
4/2/2018
 
202,506

 
168

 
964

 
 
Preferred Stock
 
5/22/2019
 
60,013

 
126

 
172

 
 
 
 
 
 
262,519

 
294

 
1,136

Total E-Commerce - Personal Goods - 0.47%*
 
 
 
 
 
598,823

 
563

 
1,560

 
 
 
 
 
 
 
 
 
 
 
Educational/Training Software
 
 
 
 
 
 
 
 
 
 
Varsity Tutors LLC(2)(5)
 
Preferred Stock
 
3/13/2017
 
240,590

 
65

 
185

Total Educational/Training Software - 0.06%*
 
 
 
 
 
240,590

 
65

 
185

 
 
 
 
 
 
 
 
 
 
 
Entertainment
 
 
 
 
 

 

 

Mind Candy, Inc.(1)(3)
 
Preferred Stock
 
3/24/2017
 
278,209

 
922

 
199

Roli, Ltd.(1)(2)(3)
 
Preferred Stock
 
5/23/2018
 
102,247

 
644

 
5

Total Entertainment - 0.06%*
 
 
 
 
 
380,456

 
1,566

 
204

 
 
 
 
 
 

 

 

Financial Institution and Services
 
 
 
 
 
 
 
 
 
 
BlueVine Capital, Inc.
 
Preferred Stock
 
9/15/2017
 
271,293

 
361

 
909

Prodigy Investments Limited(1)(3)
 
Preferred Stock
 
12/5/2017
 
41,046

 
775

 
958

Revolut Ltd.(1)(2)(3)
 
Preferred Stock
 
4/16/2018
 
6,253

 
40

 
121

 
 
Preferred Stock
 
10/29/2019
 
17,190

 
324

 
324

 
 
 
 
 
 
23,443

 
364

 
445

WorldRemit Ltd.(1)(3)
 
Preferred Stock
 
12/23/2015
 
128,288

 
382

 
478

 
 
Preferred Stock
 
12/23/2015
 
46,548

 
136

 
136

 
 
 
 
 
 
174,836

 
518

 
614

Total Financial Institution and Services - 0.88%*
 
 
 
 
 
510,618

 
2,018

 
2,926

 
 
 
 
 
 
 
 
 
 
 
Food & Drug
 
 
 
 
 
 
 
 
 
 
Capsule Corp.(2)(5)
 
Cash Exit Fee
 
12/28/2018
 

 
129

 
129

Freshly Inc.(1)
 
Preferred Stock
 
10/7/2019
 
107,732

 
580

 
580

 
 
Preferred Stock
 
10/7/2019
 
31,299

 
109

 
109

 
 
 
 
 
 
139,031

 
689

 
689

Total Food & Drug - 0.25%*
 
 
 
 
 
139,031

 
818

 
818

 
 
 
 
 
 

 

 

General Media and Content
 
 
 
 
 
 
 
 
 
 
BZ Holdings, Inc. (fka TechMediaNetwork, Inc.)(2)
 
Preferred Stock
 
3/17/2014
 
72,234

 
31

 
51

Thrillist Media Group, Inc.(2)
 
Common Stock
 
9/24/2014
 
774,352

 
624

 
1,022

Total General Media and Content - 0.32%*
 
 
 
 
 
846,586

 
655

 
1,073

 
 
 
 
 
 
 
 
 
 
 
Healthcare Technology Systems
 
 
 
 
 
 
 
 
 
 
Curology, Inc.(2)
 
Preferred Stock
 
5/23/2019
 
25,214

 
20

 
20

Groop Internet Platfom, Inc.(2)
 
Preferred Stock
 
5/15/2019
 
50,881

 
128

 
38

Nurx Inc.
 
Preferred Stock
 
8/19/2019
 
136,573

 
216

 
216

Total Healthcare Technology Systems - 0.08%*
 
 
 
 
 
212,668

 
364

 
274

 
 
 
 
 
 
 
 
 
 
 

22


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Warrant
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
Household & Office Goods
 
 
 
 
 
 
 
 
 
 
Brooklinen, Inc.
 
Preferred Stock
 
10/31/2019
 
44,822

 
$
289

 
$
289

Casper Sleep Inc.
 
Preferred Stock
 
3/1/2019
 
19,201

 
240

 
22

Total Household & Office Goods - 0.09%*
 
 
 
 
 
64,023

 
529

 
311

 
 
 
 
 
 
 
 
 
 
 
Human Resources/Recruitment
 
 
 
 
 
 
 
 
 
 
Hired, Inc.
 
Preferred Stock
 
9/21/2018
 
93,141

 
157

 
89

Total Human Resources/Recruitment - 0.03%*
 
 
 
 
 
93,141

 
157

 
89

 
 
 
 
 
 
 
 
 
 
 
Medical Software and Information Services
 
 
 
 
 
 
 
 
 
 
AirStrip Technologies, Inc.(2)
 
Preferred Stock
 
10/9/2013
 
8,036

 
112

 

Total Medical Software and Information Services - 0.00%*
 
 
 
8,036

 
112

 

 
 
 
 
 
 
 
 
 
 
 
Network Systems Management Software
 
 
 
 
 
 
 
 
 
 
Signifyd, Inc.(2)
 
Preferred Stock
 
12/19/2019
 
33,445

 
132

 
132

Total Network Systems Management Software - 0.04%*
 
 
 
 
33,445

 
132

 
132

 
 
 
 
 
 
 
 
 
 
 
Other Financial Services
 
 
 
 
 
 
 
 
 
 
Upgrade, Inc.
 
Preferred Stock
 
1/18/2019
 
744,225

 
223

 
112

Total Other Financial Services - 0.03%*
 
 
 
 
 
744,225

 
223

 
112

 
 
 
 
 
 
 
 
 
 
 
Real Estate Services
 
 
 
 
 
 
 
 
 
 
HomeLight, Inc.(2)
 
Preferred Stock
 
12/21/2018
 
54,004

 
44

 
124

Sonder USA, Inc.
 
Preferred Stock
 
12/28/2018
 
136,511

 
232

 
613

Total Real Estate Services - 0.22%*
 
 
 
 
 
190,515

 
276

 
737

 
 
 
 
 
 
 
 
 
 
 
Security Services
 
 
 
 
 
 
 
 
 
 
ForgeRock, Inc.
 
Preferred Stock
 
3/30/2016
 
195,992

 
155

 
606

 
 
Preferred Stock
 
3/30/2016
 
161,724

 
340

 
340

Total Security Services - 0.28%*
 
 
 
 
 
357,716

 
495

 
946

 
 
 
 
 
 
 
 
 
 
 
Shopping Facilitators
 
 
 
 
 
 
 
 
 
 
Moda Operandi, Inc.
 
Preferred Stock
 
9/27/2019
 
30,849

 
306

 
981

OfferUp, Inc.(2)
 
Preferred Stock
 
12/23/2019
 
44,788

 
42

 
42

Total Shopping Facilitators - 0.31%*
 
 
 
 
 
75,637

 
348

 
1,023

 
 
 
 
 
 
 
 
 
 
 
Social/Platform Software
 
 
 
 
 
 
 
 
 
 
ClassPass, Inc.
 
Preferred Stock
 
3/18/2019
 
84,507

 
281

 
281

Total Social/Platform Software - 0.08%*
 
 
 
 
 
84,507

 
281

 
281

 
 
 
 
 
 
 
 
 
 
 
Transportation
 
 
 
 
 
 
 
 
 
 
Bird Rides, Inc.
 
Preferred Stock
 
4/18/2019
 
68,111

 
193

 
193

Total Transportation - 0.06%*
 
 
 
 
 
68,111

 
193

 
193

 
 
 
 
 
 
 
 
 
 
 
Travel & Leisure
 
 
 
 
 
 
 
 
 
 
GoEuro Corp.(1)(2)(3)
 
Preferred Units
 
3/26/2018
 
8,558

 
257

 
257

Inspirato, LLC(2)(3)
 
Preferred Units
 
4/25/2013
 
1,994

 
37

 
45

Total Travel & Leisure - 0.09%*
 
 
 
 
 
10,552

 
294

 
302

 
 
 
 
 
 
 
 
 
 
 
Wireless Communications Equipment
 
 
 
 
 
 
 
 
 
 
Cambridge Broadband Network Limited(1)(3)
 
Preferred Shares
 
9/3/2014
 
33,000

 
95

 

Total Wireless Communications Equipment - 0.00%*
 
 
 
 
 
33,000

 
95

 

 
 
 
 
 
 
 
 
 
 
 
Total Warrant Investments - 6.64%*
 
 
 
 
 
 
 
$
18,150

 
$
22,090


23


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Equity
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
Equity Investments(8)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Applications Software
 
 
 
 
 
 
 
 
 
 
Convoy, Inc.(2)
 
Preferred Stock
 
9/27/2018
 
35,208

 
$
250

 
$
353

Medallia, Inc.(2)(10)
 
Common Stock
 
11/13/2014
 
48,616

 
11

 
1,452

Passport Labs, Inc.(2)
 
Preferred Stock
 
6/11/2019
 
1,302

 
100

 
100

Total Business Applications Software - 0.57%*
 
 
 
 
 
85,126

 
361

 
1,905

 
 
 
 
 
 
 
 
 
 
 
Communications Software
 
 
 
 
 
 
 
 
 
 
Pluribus Networks, Inc.(2)
 
Preferred Stock
 
1/10/2017
 
722,073

 
2,000

 
2,000

Total Communications Software - 0.60%*
 
 
 
 
 
722,073

 
2,000

 
2,000

 
 
 
 
 
 
 
 
 
 
 
Consumer Non-Durables
 
 
 
 
 
 
 
 
 
 
Hims, Inc.(2)
 
Preferred Stock
 
4/29/2019
 
144,092

 
500

 
506

Total Consumer Non-Durables - 0.15%*
 
 
 
 
 
144,092

 
500

 
506

 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Clothing and Accessories
 
 
 
 
 
 
 
 
 
 
FabFitFun, Inc.(2)
 
Preferred Stock
 
1/17/2019
 
67,934

 
500

 
595

Total E-Commerce - Clothing and Accessories - 0.18%*
 
 
 
 
 
67,934

 
500

 
595

 
 
 
 
 
 
 
 
 
 
 
E-Commerce - Personal Goods
 
 
 
 
 
 
 
 
 
 
Grove Collaborative, Inc.(2)
 
Preferred Stock
 
6/5/2018
 
134,249

 
500

 
975

Total E-Commerce - Personal Goods - 0.29%*
 
 
 
 
 
134,249

 
500

 
975

 
 
 
 
 
 
 
 
 
 
 
Educational/Training Software
 
 
 
 
 
 
 
 
 
 
Varsity Tutors LLC(2)
 
Preferred Stock
 
1/5/2018
 
92,470

 
250

 
249

Total Educational/Training Software - 0.07%*
 
 
 
 
 
92,470

 
250

 
249

 
 
 
 
 
 
 
 
 
 
 
Financial Institution and Services
 
 
 
 
 
 
 
 
 
 
GoGreenHost AB(1)(2)(3)
 
Preferred Stock
 
12/1/2017
 
1

 
2,134

 
1,236

Revolut Ltd.(1)(2)(3)
 
Preferred Stock
 
8/3/2017
 
25,920

 
292

 
1,189

Total Financial Institution and Services - 0.73%*
 
 
 
 
 
25,921

 
2,426

 
2,425

 
 
 
 
 
 
 
 
 
 
 
Food & Drug
 
 
 
 
 
 
 
 
 
 
Capsule Corp.(2)
 
Preferred Stock
 
7/25/2019
 
75,013

 
500

 
500

Total Food & Drug - 0.15%*
 
 
 
 
 
75,013

 
500

 
500

 
 
 
 
 
 
 
 
 
 
 
Healthcare Technology Systems
 
 
 
 
 
 
 
 
 
 
Curology, Inc.(2)
 
Preferred Stock
 
11/26/2019
 
60,514

 
180

 
213

Groop Internet Platfom, Inc.(2)
 
Preferred Stock
 
5/15/2019
 
90,859

 
250

 
250

Nurx Inc.(2)
 
Preferred Stock
 
5/31/2019
 
136,572

 
1,000

 
1,004

Total Healthcare Technology Systems - 0.44%*
 
 
 
 
 
287,945

 
1,430

 
1,467

 
 
 
 
 
 
 
 
 
 
 
Household & Office Goods
 
 
 
 
 
 
 
 
 
 
Casper Sleep Inc.(2)
 
Preferred Stock
 
6/19/2017
 
8,000

 
250

 
252

 
 
Common Stock
 
6/30/2019
 
26,669

 
750

 
340

Total Household & Office Goods - 0.18%*
 
 
 
 
 
34,669

 
1,000

 
592

 
 
 
 
 
 
 
 
 
 
 
Network Systems Management Software
 
 
 
 
 
 
 
 
 
 
Cohesity Inc.(2)
 
Preferred Stock
 
3/24/2017
 
60,342

 
400

 
550

Total Network Systems Management Software - 0.17%*
 
 
 
 
60,342

 
400

 
550

 
 
 
 
 
 
 
 
 
 
 
Real Estate Services
 
 
 
 
 
 
 
 
 
 
Sonder Canada, Inc.(1)(2)(3)
 
Preferred Stock
 
5/17/2019
 
29,773

 
312

 
312

Total Real Estate Services - 0.09%*
 
 
 
 
 
29,773

 
312

 
312

 
 
 
 
 
 
 
 
 
 
 

24


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2019
Venture Growth Stage Company
 
Type of Equity
 
Acquisition Date(12)
 
Shares
 
Cost(6)
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
Security Services
 
 
 
 
 
 
 
 
 
 
CrowdStrike, Inc.(2)(10)
 
Common Stock
 
10/13/2017
 
278,747

 
$
1,072

 
$
13,901

Total Security Services - 4.18%*
 
 
 
 
 
278,747

 
1,072

 
13,901

 
 
 
 
 
 
 
 
 
 
 
Travel & Leisure
 
 
 
 
 
 
 
 
 
 
GoEuro Corp.(1)(2)(3)
 
Preferred Stock
 
10/5/2017
 
2,362

 
300

 
278

Inspirato, LLC(2)(4)
 
Preferred Units
 
9/11/2014
 
1,948

 
250

 
266

Total Travel & Leisure - 0.16%*
 
 
 
 
 
4,310

 
550

 
544

 
 
 
 
 
 
 
 
 
 
 
Total Equity Investments - 7.98%*
 
 
 
 
 
 
 
$
11,801

 
$
26,521

 
 
 
 
 
 
 
 
 
 
 
Total Investments in Portfolio Companies - 196.43%*(11)
 
 
 
 
 
$
660,675

 
$
653,129

 
 
 
 
 
 
 
 
 
 
 
Total Investments - 196.43%*(9)
 
 
 
 
 
 
 
$
660,675

 
$
653,129

_______________
(1)
Investment is a non-qualifying asset under Section 55(a) of the 1940 Act. As of December 31, 2019 non-qualifying assets represented 21.9% of the Company’s total assets, at fair value.
(2)
As of December 31, 2019, this investment was not pledged as collateral as part of the Company’s revolving credit facility.
(3)
Entity is not domiciled in the United States and does not have its principal place of business in the United States.
(4)
Investment is owned by TPVG Investment LLC, a wholly owned taxable subsidiary of the Company.
(5)
Investment is a cash success fee or a cash exit fee payable on the consummation of certain trigger events.
(6)
Gross unrealized gains, gross unrealized losses, and net unrealized losses for federal income tax purposes totaled $24.0 million, $31.5 million, and $7.5 million, respectively, for the December 31, 2019 investment portfolio. The tax cost of investments is $660.7 million.
(7)
Debt is on non-accrual status at December 31, 2019 and is therefore considered non-income producing. Non-accrual investments at December 31, 2019 had a total cost and fair value of $49.5 million and $26.5 million, respectively.
(8)
Non-income producing investments.
(9)
Except for equity in two public companies, all investments were valued at fair value using Level 3 significant unobservable inputs as determined in good faith by the Board.
(10)
Entity is publicly traded and listed on New York Stock Exchange or NASDAQ.
(11)
The Company generally acquires its investments in private transactions exempt from registration under 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.
(12)
Acquisition date represents the date of the investment in the portfolio investment.
*
Value as a percentage of net assets.
_______________

Notes applicable to the investments presented in the foregoing tables:
No investment represents a 5% or greater interest in any outstanding class of voting security of the portfolio company.
Notes applicable to the debt investments presented in the foregoing tables:
Interest rate is the annual interest rate on the debt investment and does not include any original issue discount (“OID”), end-of-term (“EOT”) payment, or any additional fees related to the investments, such as deferred interest, commitment fees or prepayment fees.
For each debt investment tied to the U.S. Prime rate (“Prime Rate”) as of June 30, 2020, Prime was 3.25%. As of June 30, 2020, a majority of the debt investments (approximately 69.7% or $469.6 million in principal balance) in the Company’s portfolio bore interest at floating rates, which generally are Prime-based, all of which have interest rate floors of 3.25% or higher and some of which have interest rate caps for a limited period.
The EOT payments are contractual and fixed interest payments due in cash at the maturity date of the loan, including upon prepayment, and are a fixed percentage of the original principal balance of the loan unless otherwise noted. The EOT payment is amortized and recognized as non-cash income over the loan or lease prior to its payment.
Some of the terms noted in the foregoing tables are subject to change based on certain events such as prepayments.

25


TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2020
(unaudited)
Note 1. Organization
TriplePoint Venture Growth BDC Corp. (the “Company”), a Maryland corporation, was formed on June 28, 2013 and priced its initial public offering and commenced investment operations on March 5, 2014. The Company is structured as an externally-managed non-diversified, closed-end investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company has elected to be treated, and intends to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).
The Company was formed to expand the venture growth stage business segment of TriplePoint Capital LLC’s (“TPC”) investment platform. TPC is widely recognized as a leading global financing provider devoted to serving venture capital-backed companies with creative, flexible and customized debt financing, equity capital and complementary services throughout their lifespan. The Company’s investment objective is to maximize its total return to stockholders primarily in the form of current income and, to a lesser extent, capital appreciation by lending primarily with warrants to venture growth stage companies focused in technology, life sciences and other high growth industries backed by TPC’s select group of leading venture capital investors. The Company is externally managed by TriplePoint Advisers LLC (the “Adviser”), which is registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and is a wholly owned subsidiary of TPC. The Adviser is responsible for sourcing, reviewing and structuring investment opportunities, underwriting and performing due diligence on investments and monitoring the investment portfolio on an ongoing basis. The Adviser was organized in August 2013 and, pursuant to an investment advisory agreement entered into between the Company and the Adviser, the Company pays the Adviser a base management fee and an incentive fee for its services. The Company has also entered into an administration agreement with TriplePoint Administrator LLC (the “Administrator”), a wholly owned subsidiary of the Adviser, and pays fees and expenses for services provided.
The Company has two wholly owned subsidiaries: TPVG Variable Funding Company LLC (the “Financing Subsidiary”), a bankruptcy remote special purpose entity established for utilizing the Company’s revolving credit facility, and TPVG Investment LLC, an entity established for holding certain of the Company’s investments in order to benefit from the tax treatment of these investments and create a tax structure that is more advantageous with respect to the Company’s RIC tax treatment. These subsidiaries are consolidated in the financial statements of the Company.
Note 2. Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures required by GAAP for the annual reporting of consolidated financial statements are omitted.
The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All adjustments and reclassifications that are necessary for the fair representation of financial results as of and for the periods presented have been included and all intercompany account balances and transactions have been eliminated.
Certain items in the prior period’s consolidated financial statements have been conformed to the current period’s presentation. These presentation changes, if any, did not impact any prior amounts of reported total assets, total liabilities, net assets or results of operations.
These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 4, 2020.
Note 3. Related Party Agreements and Transactions
Investment Advisory Agreement
In accordance with the Board approved investment advisory agreement (the “Advisory Agreement”), subject to the overall supervision of the Board and in accordance with the 1940 Act, the Adviser manages the day-to-day operations and provides investment advisory services to the Company. Under the terms of the Advisory Agreement, the Adviser:
determines the composition of the Company’s portfolio, the nature and timing of changes to the Company’s portfolio and the manner of implementing such changes;
identifies, evaluates and negotiates the structure of investments;
executes, closes, services and monitors investments;
determines the securities and other assets purchased, retained or sold;

26


performs due diligence on prospective investments; and
provides the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.
As consideration for the investment advisory and management services provided, and pursuant to the Advisory Agreement, the Company has agreed to pay the Adviser a fee consisting of two components—a base management fee and an incentive fee. The cost of both the base management fee and incentive fee is ultimately borne by the Company’s stockholders.
The base management fee is calculated at an annual rate of 1.75% of the Company’s average adjusted gross assets, including assets purchased with borrowed funds. For services rendered under the Advisory Agreement, the base management fee is payable quarterly in arrears. The base management fee is calculated based on the average value of the Company’s gross assets at the end of its two most recently completed calendar quarters. Such amount is appropriately adjusted (based on the actual number of days elapsed relative to the total number of days in such calendar quarter) for any share issuances or repurchases during a calendar quarter. Base management fees for any partial month or quarter are appropriately pro-rated.
The incentive fee, which provides the Adviser with a share of the income it generates for the Company, consists of two components- net investment income and net capital gains-which are largely independent of each other, and may result in one component being payable in a given period even if the other is not payable.
Under the investment income component, the Company pays the Adviser each quarter 20.0% of the amount by which the Company’s pre-incentive fee net investment income for the quarter exceeds a hurdle rate of 2.0% (8.0% annualized) of the Company’s net assets at the end of the immediately preceding calendar quarter, subject to a “catch-up” provision pursuant to which the Adviser receives all of such income in excess of 2.0% but less than 2.5%, subject to a total return requirement. The effect of the “catch-up” provision is that, subject to the total return provision discussed below, if pre-incentive fee net investment income exceeds 2.5% in any calendar quarter, the Adviser receives 20.0% of the Company’s pre-incentive fee net investment income as if the 2.0% hurdle rate did not apply. The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in respect of the Company’s pre-incentive fee net investment income is payable except to the extent that 20.0% of the cumulative net increase in net assets resulting from operations since the effective date of the Company’s election to be regulated as a BDC exceeds the cumulative incentive fees accrued and/or paid since the effective date of the Company’s election to be regulated as a BDC. In other words, any investment income incentive fee that is payable in a calendar quarter is limited to the lesser of (i) 20.0% of the amount by which the Company’s pre-incentive fee net investment income for such calendar quarter exceeds the 2.0% hurdle, subject to the “catch-up” provision and (ii) (x) 20.0% of the cumulative net increase in net assets resulting from operations since the effective date of the Company’s election to be regulated as a BDC minus (y) the cumulative incentive fees accrued and/or paid since the effective date of the Company’s election to be regulated as a BDC. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the sum of the Company’s pre-incentive fee net investment income, realized gains and losses and unrealized appreciation and depreciation since the effective date of the Company’s election to be regulated as a BDC. The Company elected to be regulated as a BDC under the 1940 Act on March 5, 2014.
Pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, does not include any realized capital gains, realized capital losses or unrealized capital gains or losses. Because of the structure of the incentive fee, it is possible that the Company may pay an incentive fee in a quarter where it incurs a loss, subject to the total return requirement described in the preceding paragraph. For example, if the Company receives pre-incentive fee net investment income in excess of the quarterly minimum hurdle rate, the Company may pay the applicable incentive fee even if it has incurred a loss in that quarter due to realized and unrealized losses. The Company’s net investment income used to calculate this component of the incentive fee is also included in the amount of the Company’s assets used to calculate the 1.75% base management fee. These calculations are appropriately adjusted for any share issuance or repurchase during the relevant quarter.
Under the capital gains component of the incentive fee, the Company pays the Adviser at the end of each calendar year (or upon termination of the Advisory Agreement) 20.0% of the Company’s aggregate cumulative realized capital gains from inception through the end of that year (or upon termination of the Advisory Agreement), computed net of aggregate cumulative realized capital losses and aggregate cumulative unrealized losses through the end of such year, less the aggregate amount of any previously paid capital gains incentive fees. For the foregoing purpose, the Company’s “aggregate cumulative realized capital gains” does not include any unrealized gains. It should be noted that the Company accrues an incentive fee for accounting purposes taking into account any unrealized gains in accordance with GAAP. The capital gains component of the incentive fee is not subject to any minimum return to stockholders. If such amount is negative, then no capital gains incentive fee is payable for such year. Additionally, if the Advisory Agreement is terminated as of a date that is not a calendar year end, the termination date will be treated as though it were a calendar year end for purposes of calculating and paying the capital gains incentive fee.
The base management fee accrued and payable, income incentive fee accrued and payable, and capital gains incentive fee accrued are included in the Company’s consolidated financial statements and summarized in the table below. Base management and incentive fees are paid in the quarter following that in which they are earned. The Adviser has agreed to exclude the U.S. Treasury bills acquired at the end of each applicable quarter in the calculation of gross assets for purposes of determining its base management fee. The Company had cumulative realized and unrealized losses as of June 30, 2020 and 2019, and, as a result, no capital gains incentive fees were recorded for the three and six months ended June 30, 2020 and 2019.

27


Base Management and Incentive Fees
(in thousands)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Base management fee
 
$
3,235

 
$
2,076

 
$
6,010

 
$
3,837

Income incentive fee
 
$
2,884

 
$
2,530

 
$
2,884

 
$
5,009

Capital gains incentive fee
 
$

 
$

 
$

 
$

Administration Agreement
The Board-approved administration agreement (the “Administration Agreement”) provides that the Administrator is responsible for furnishing the Company with office facilities and equipment and providing the Company with clerical, bookkeeping, recordkeeping services and other administrative services at such facilities. Under the Administration Agreement, the Administrator performs, or oversees, or arranges for, the performance of the Company’s required administrative services, which includes being responsible for the financial and other records which the Company is required to maintain and preparing reports to the Company’s stockholders and reports and other materials filed with the SEC and any other regulatory authority. In addition, the Administrator assists the Company in determining and publishing net asset value (“NAV”), overseeing the preparation and filing of the Company’s tax returns and printing and disseminating reports and other materials to the Company’s stockholders, and generally oversees the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Under the Administration Agreement, the Administrator also provides significant managerial assistance on the Company’s behalf to those companies that have accepted the Company’s offer to provide such assistance.
In full consideration of the provision of the services of the Administrator, the Company reimburses the Administrator for the costs and expenses incurred by the Administrator in performing its obligations and providing personnel and facilities under the Administration Agreement. Payments under the Administration Agreement are equal to the Company’s allocable portion (subject to the review of the Board) of the Administrator’s overhead resulting from its obligations under the Administration Agreement, including rent and the allocable portion of the cost of the chief compliance officer and chief financial officer and their respective staffs. In addition, if requested to provide significant managerial assistance to the Company’s portfolio companies, the Administrator is paid an additional amount based on the services provided, which shall not exceed the amount the Company receives from such companies for providing this assistance.
For the three and six months ended June 30, 2020, expenses paid or payable by the Company to the Administrator under the Administration Agreement were $0.6 million and $1.3 million, respectively.
For the three and six months ended June 30, 2019, expenses paid or payable by the Company to the Administrator under the Administration Agreement were $0.4 million and $0.8 million, respectively.
Note 4. Investments
The Company measures the fair value of its investments in accordance with Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure, or “ASC Topic 820,” issued by the FASB. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The Valuation Committee of the Board is responsible for assisting the Board in valuing investments that are not publicly traded or for which current market values are not readily available. Investments for which market quotations are readily available are valued using market quotations, which are generally obtained from independent pricing services, broker-dealers or market makers. With respect to portfolio investments for which market quotations are not readily available, the Board, with the assistance of the Adviser and its senior investment team and independent valuation agents, is responsible for determining, in good faith, the fair value in accordance with the valuation policy approved by the Board. If more than one valuation method is used to measure fair value, the results are evaluated and weighted, as appropriate, considering the reasonableness of the range indicated by those results. The Adviser considers a range of fair values based upon the valuation techniques utilized and selects a value within that range that most accurately represents fair value based on current market conditions as well as other factors the Adviser’s senior investment team considers relevant. The Board determines fair value of its investments on at least a quarterly basis or at such other times when the Board feels it would be appropriate to do so given the circumstances. A determination of fair value involves subjective judgments and estimates and depends on the facts and circumstances present at each valuation date. Due to the inherent uncertainty of determining fair value of portfolio investments that do not have a readily available market value, fair value of investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.
ASC Topic 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. ASC Topic 820 also provides guidance regarding a fair value hierarchy, which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level of information used in the valuation. In accordance with ASC Topic 820, these inputs are summarized in the three levels listed below.
Level 1—Valuations are based on quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.
Level 2—Valuations are based on quoted prices (in non-active markets or in active markets for similar assets or liabilities), observable inputs other than quoted prices and inputs that are not directly observable but are corroborated by observable market data.
Level 3—Valuations are based on inputs that are unobservable and significant to the overall fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models incorporating significant unobservable

28


inputs, such as discounted cash flow models and other similar valuations techniques. The valuation of Level 3 assets and liabilities generally requires significant management judgment due to the inability to observe inputs to valuation.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of observable input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and it considers factors specific to the investment.
Under ASC Topic 820, the fair value measurement also assumes that the transaction to sell an asset occurs in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset, which may be a hypothetical market, excluding transaction costs. The principal market for any asset is the market with the greatest volume and level of activity for such asset in which the reporting entity would or could sell or transfer the asset. In determining the principal market for an asset or liability, it is assumed that the reporting entity has access to such market as of the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable and willing and able to transact.
With respect to investments for which market quotations are not readily available, the Board undertakes a multi-step valuation process each quarter, as described below:
The quarterly valuation process begins with each portfolio company or investment being initially valued by the Adviser’s professionals that are responsible for the portfolio investment;
Preliminary valuation conclusions are then documented and discussed with the Adviser’s senior investment team and approved by the Adviser’s executive management team;
Each quarter, certain of the Company's portfolio companies or investments are reviewed by an independent third-party valuation firm. At least once annually, the valuation for each portfolio investment is reviewed by such an independent third-party valuation firm. However, the Board does not have de minimis investments of less than 1.0% of the Company’s gross assets (up to an aggregate of 10% of the Company’s gross assets) independently reviewed, given the expenses involved in connection therewith;
The Valuation Committee of the Board then reviews these preliminary valuations and makes fair value recommendations to the Board; and
The Board then discusses valuations and determines the fair value of each investment in the Company’s portfolio in good faith, based on the input of the Adviser, the respective independent third-party valuation firms and the Valuation Committee.
Debt Investments
The debt investments identified on the consolidated schedules of investments are loans and equipment leases made to venture growth stage companies focused in technology, life sciences and other high growth industries which are backed by a select group of leading venture capital investors. These investments are considered Level 3 assets under ASC Topic 820 as there is no known or accessible market or market indices for these types of debt instruments and thus the Adviser’s senior management team must estimate the fair value of these investment securities based on models utilizing unobservable inputs.
To estimate the fair value of debt investments, the Company compares the cost basis of each debt investment, including any OID, to the resulting fair value determined using a discounted cash flow model, unless another model is more appropriate based on the circumstances at the measurement date. The discounted cash flow approach entails analyzing the interest rate spreads for recently completed financing transactions which are similar in nature to these debt investments, in order to determine a comparable range of effective market interest rates. The range of interest rate spreads utilized is based on borrowers with similar credit profiles. All remaining expected cash flows of the investment are discounted using this range of interest rates to determine a range of fair values for the debt investment.
The valuation process includes, among other things, evaluating the underlying investment performance of the portfolio company’s current financial condition and ability to raise additional capital, as well as macro-economic events that may impact valuations. These events include, but are not limited to, current market yields and interest rate spreads of similar securities as of the measurement date. Changes in these unobservable inputs could result in significantly different fair value measurements.
Under certain circumstances, an alternative technique may be used to value certain debt investments that better reflect the fair value of the investment, such as the price paid or realized in a recently completed transaction or a binding offer received in an arm’s length transaction, the use of multiple probability weighted cash flow models when the expected future cash flows contain elements of variability or estimates of proceeds that would be received in a liquidation scenario.
Warrant Investments
Warrant fair values are primarily determined using a Black Scholes option pricing model. Privately held warrants and equity-related securities are valued based on an analysis of various factors, including, but not limited to, those listed below. Increases or decreases in any of the unobservable inputs described below could result in a material change in fair value:
Underlying enterprise value of the issuer based on available information, including any information regarding the most recent financing round of borrower. Valuation techniques to determine enterprise value include market multiple approaches, income approaches or the use of recent rounds of financing and the portfolio company’s capital structure. Valuation techniques are also utilized to allocate the enterprise fair value of a portfolio company to the specific class of common or preferred stock exercisable in

29


the warrant. Such techniques take into account the rights and preferences of the portfolio company’s securities, expected exit scenarios, and volatility associated with such outcomes to allocate the fair value to the specific class of stock held in the portfolio. Such techniques include option pricing models, including back solve techniques, probability weighted expected return models and other techniques determined to be appropriate.
Volatility, or the amount of uncertainty or risk about the size of the changes in the warrant investment price, is based on comparable publicly traded companies within indices similar in nature to the underlying company issuing the warrant.
The risk-free interest rates are derived from the U.S. Treasury yield curve. The risk-free interest rates are calculated based on a weighted average of the risk-free interest rates that correspond closest to the expected remaining life of the warrant investment.
Other adjustments, including a marketability discount on private company warrant investments, are estimated based on the Adviser’s judgment about the general industry environment.
Historical portfolio experience on cancellations and exercises of warrant investments are utilized as the basis for determining the estimated life of the warrant investment in each financial reporting period. Warrant investments may be exercised in the event of acquisitions, mergers or initial public offerings, and cancelled due to events such as bankruptcies, restructuring activities or additional financings. These events cause the expected remaining life assumption to be shorter than the contractual term of the warrant investment.
Under certain circumstances alternative techniques may be used to value certain warrants that more accurately reflect the warrants' fair values, such as an expected settlement of a warrant in the near term, a model that incorporates a put feature associated with the warrant, or the price paid or realized in a recently completed transaction or binding offer received in an arm’s-length transaction. The fair value may be determined based on the expected proceeds to be received from such settlement or based on the net present value of the expected proceeds from the put option.
These valuation methodologies involve a significant degree of judgment. There is no single standard for determining the estimated fair value of investments that do not have an active observable market. Valuations of privately held investments are inherently uncertain, as they are based on estimates, and their values may fluctuate over time. The determination of fair value may differ materially from the values that would have been used if an active market for these investments existed. In some cases, the fair value of such investments is best expressed as a range of values derived utilizing different methodologies from which a single estimate may then be determined.
Equity Investments
The fair value of an equity investment in a privately held company is initially the amount invested. The Company adjusts the fair value of equity investments in private companies upon the completion of a new third party round of equity financing subsequent to its investment. The Company may adjust the fair value of an equity investment absent a new equity financing event based upon positive or negative changes in a portfolio company’s financial or operational performance. The Company may also reference comparable transactions and/or secondary market transactions of comparable companies to estimate fair value. These valuation methodologies involve a significant degree of judgment.
The fair value of an equity investment in a publicly traded company is based upon the closing public share price on the date of measurement. These assets are recorded at fair value on a recurring basis. There is no single standard for determining the estimated fair value of investments which do not have an active public market. Valuations of privately held investments are inherently uncertain, as they are based on estimates, and their values may fluctuate over time. The determination of fair value may differ materially from the values that would have been used if an active market for these investments existed. In some cases, the fair value of such investments is best expressed as a range of values derived utilizing different methodologies from which a single estimate may then be determined.
Investment Valuation
Investments measured at fair value on a recurring basis are categorized in the table below based upon the lowest level of significant input to the valuations as of June 30, 2020 and December 31, 2019. The Company transfers investments in and out of Level 1, 2 and 3 as of the beginning balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period.
Investment Type
(in thousands)
 
June 30, 2020
 
December 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Debt investments
 
$

 
$

 
$
652,533

 
$
652,533

 
$

 
$

 
$
604,518

 
$
604,518

Warrant investments
 

 

 
20,996

 
20,996

 

 

 
22,090

 
22,090

Equity investments
 
6,918

 
308

 
12,098

 
19,324

 
13,901

 
1,452

 
11,168

 
26,521

Total investments
 
$
6,918

 
$
308

 
$
685,627

 
$
692,853

 
$
13,901

 
$
1,452

 
$
637,776

 
$
653,129

The following tables show information about Level 3 investments measured at fair value for the six months ended June 30, 2020 and 2019. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the net unrealized gains and losses for assets within the Level 3 category may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.

30


Level 3
Investment Activity (in thousands)
 
For the Six Months Ended June 30, 2020
 
Debt Investments
 
Warrant Investments
 
Equity Investments
 
Total Investments
Fair value as of December 31, 2019
 
$
604,518

 
$
22,090

 
$
11,168

 
$
637,776

Funding and purchases of investments, at cost
 
97,151

 
1,227

 
1,545

 
99,923

Principal payments and sale proceeds received from investments
 
(44,552
)
 

 

 
(44,552
)
Amortization and accretion of premiums and discounts, net and end-of term payments
 
8,048

 

 

 
8,048

Realized gains (losses) on investments
 
(18,037
)
 
(384
)
 

 
(18,421
)
Net change in unrealized gains (losses) included in earnings
 
1,789

 
(1,937
)
 
(23
)
 
(171
)
Payment-in-kind coupon
 
3,616

 

 

 
3,616

Gross transfers out of Level 3(1)
 

 

 
(592
)
 
(592
)
Fair value as of June 30, 2020
 
$
652,533

 
$
20,996

 
$
12,098

 
$
685,627

 
 
 
 
 
 
 
 
 
Net change in unrealized gains (losses) on Level 3 investments held as of June 30, 2020
 
$
(15,999
)
 
$
(2,032
)
 
$
(23
)
 
$
(18,054
)
_______________
(1)
Transfers out of Level 3 are measured as of the date of the transfer. During the six months ended June 30, 2020 the only transfer relates to an equity investment in a publicly traded company.
Level 3
Investment Activity (in thousands)
 
For the Six Months Ended June 30, 2019
 
Debt Investments
 
Warrant Investments
 
Equity Investments
 
Total Investments
Fair value as of December 31, 2018
 
$
405,347

 
$
15,518

 
$
10,556

 
$
431,421

Funding and purchases of investments, at cost
 
158,743

 
1,959

 
2,401

 
163,103

Principal payments and sale proceeds received from investments
 
(121,797
)
 

 

 
(121,797
)
Amortization and accretion of premiums and discounts, net and end-of term payments
 
4,977

 

 

 
4,977

Realized gains (losses) on investments
 

 
7

 

 
7

Net change in unrealized gains (losses) included in earnings
 
(3,619
)
 
2,021

 
18,846

 
17,248

Payment-in-kind coupon
 
1,062

 

 

 
1,062

Gross transfers out of Level 3(1)
 

 

 
(22,132
)
 
(22,132
)
Fair value as of June 30, 2019
 
$
444,713

 
$
19,505

 
$
9,671

 
$
473,889

 
 
 
 
 
 
 
 
 
Net change in unrealized gains (losses) on Level 3 investments held as of June 30, 2019
 
$
(1,140
)
 
$
(124
)
 
$
(270
)
 
$
(1,534
)
_______________
(1)
Transfers out of Level 3 are measured as of the date of the transfer. During the six months ended June 30, 2019, these transfers relate to an equity investment in a publicly traded company.
Realized gains and losses are included in net realized gains (losses) on investments in the consolidated statements of operations.
During the three months ended June 30, 2020, the Company recognized net realized gains on investments of $0.8 million, consisting of $19.4 million of realized gains from the sale of publicly traded shares held in CrowdStrike, Inc. offset by $18.0 of realized losses from the finalization of asset sales and removal of two obligors, Cambridge Broadband Network Limited and Harvest Power, Inc., rated Red (5) on the Company’s credit watch list, and $0.6 million of other net realized losses. During the three months ended June 30, 2019, the Company recognized net realized losses on investments of approximately $17,000, as a result of changes in foreign currency between the time of investment and liquidation.
During the six months ended June 30, 2020, the Company recognized net realized gains on investments of $0.5 million, consisting of $19.4 million of realized gains from the sale of publicly traded shares held in CrowdStrike, Inc. offset by $18.0 of realized losses from the finalization of asset sales and removal of two obligors, Cambridge Broadband Network Limited and Harvest Power, Inc., rated Red (5) on the Company’s credit watch list, and $0.9 million of other net realized losses. During the six months ended June 30, 2019, the Company recognized net realized losses on investments of approximately $46,000, as a result of changes in foreign currency between the time of investment and liquidation.
Unrealized gains and losses are included in net change in unrealized gains (losses) on investments in the consolidated statements of operations.
Net change in unrealized gains during the three months ended June 30, 2020 was $8.9 million, resulting from the reversal of $18.0 million of previously recorded unrealized losses from the finalization of asset sales and removal of two obligors rated Red (5) on the Company’s credit watch list and by $2.5 million of net unrealized gains from mark-to-market related changes and credit-related adjustments, partially offset by the reversal of $11.6 million of previously recorded unrealized gains associated with the shares of CrowdStrike, Inc. sold during the quarter. Net change in unrealized gains during the three months ended June 30, 2019 was $13.8 million, which primarily consisted of net unrealized gains of $14.0 million on the investment portfolio related to mark to market activity attributed to one portfolio company, following its initial public offering,

31


offset by net unrealized losses of $0.3 million as a result of changes in funds held in foreign currency for investment and a decline in the price of the Company’s equity in one portfolio company.
Net change in unrealized losses during the six months ended June 30, 2020 was $8.1 million, resulting primarily from valuation adjustments related to market yields and credit-related adjustments, the reversal of $11.6 million of previously recorded unrealized gains associated with the shares of CrowdStrike, Inc. sold during the quarter, partially offset by the reversal of $18.0 million of previously recorded unrealized losses from the finalization of asset sales and removal of two obligors rated Red (5) on the Company’s credit watch list. Net change in unrealized gains during the six months ended June 30, 2019 was $14.9 million, which consisted of $17.1 million of net unrealized gains on the investment portfolio related to valuation adjustments primarily from the Company’s investment in one portfolio company following its initial public offering, as well as appreciation in the Company’s investment in another publicly traded portfolio company, offset by the reversal and recognition of previously recorded net unrealized gains of $1.9 million into income or realized gains due to the disposition of five portfolio companies and net unrealized losses of $0.3 million as a result of changes in funds held in foreign currency for investment.
For the three months ended June 30, 2020, the Company recognized $0.5 million in other income, consisting of $0.1 million due to the termination or expiration of unfunded commitments and $0.4 million from the realization of certain fees paid by portfolio companies and other income related to prepayment activity. For the three months ended June 30, 2019, the Company recognized $1.0 million in other income, primarily consisting of $0.9 million from amortization of certain fees paid by portfolio companies and other income.
For the six months ended June 30, 2020, the Company recognized $1.1 million in other income, consisting of $0.7 million due to the termination or expiration of unfunded commitments and $0.4 million from the realization of certain fees paid by portfolio companies and other income related to prepayment activity. For the six months ended June 30, 2019, the Company recognized $1.4 million in other income, consisting of $0.3 million from the termination or expiration of unfunded commitments and $1.1 million from amortization of certain fees paid by portfolio companies and other income.
The following tables show a summary of quantitative information about the Level 3 fair value measurements of investments as of June 30, 2020 and December 31, 2019. In addition to the techniques and inputs noted in the tables below, the Company may also use other valuation techniques and methodologies when determining fair value measurements.
Level 3 Investments
(dollars in thousands)
 
June 30, 2020
 
Fair Value
 
Valuation Technique
 
Unobservable Inputs
 
Range
 
Weighted Average
Debt investments
 
$
636,033

 
Discounted Cash Flows
 
Discount Rate
 
7.52% - 33.97%
 
15.63%
 
 
16,500

 
Probability-Weighted Expected Return Method
 
Probability Weighting of Alternative Outcomes
 
50.00% - 100.00%
 
 
Warrant investments
 
19,285

 
Black Scholes Option Pricing Model
 
Revenue Multiples
 
0.89x - 86.16x
 
8.24x
 
 
 
 
 
 
Volatility
 
40.00% - 90.00%
 
60.39%
 
 
 
 
 
 
Term
 
0.20 - 5.00 Years
 
3.11 Years
 
 
 
 
 
 
Discount for Lack of Marketability
 
5.00% - 20.00%
 
19.41%
 
 
 
 
 
 
Risk Free Rate
 
0.16% - 0.44%
 
0.22%
 
 
1,711

 
Discounted Expected Return
 
Discount Rate
 
20.00% - 40.00%
 
29.53%
 
 
 
 
 
 
Term
 
1.90 - 4.00 Years
 
2.91 Years
 
 
 
 
 
 
Expected Recovery Rate
 
18.75% - 100.00%
 
59.24%
Equity investments
 
10,930

 
Black Scholes Option Pricing Model
 
Revenue Multiples
 
0.89x - 8.07x
 
3.30x
 
 
 
 
 
 
Volatility
 
45.00% - 85.00%
 
59.78%
 
 
 
 
 
 
Term
 
1.00 - 4.50 Years
 
3.07 Years
 
 
 
 
 
 
Discount for Lack of Marketability
 
5.00%
 
5.00%
 
 
 
 
 
 
Risk Free Rate
 
0.16% - 0.44%
 
0.24%
 
 
 
 
 
 
EBITDA Multiples
 
18.81x - 25.08x
 
21.94x
 
 
1,168

 
Discounted Expected Recovery
 
Expected Recovery Rate
 
48.18%
 
48.18%
Total investments
 
$
685,627

 
 
 
 
 
 
 
 

32


Level 3 Investments
(dollars in thousands)
 
December 31, 2019
 
Fair Value
 
Valuation Technique
 
Unobservable Inputs
 
Range
 
Weighted Average
Debt investments
 
$
577,984

 
Discounted Cash Flows
 
Discount Rate
 
9.91% - 25.75%
 
15.01%
 
 
26,534

 
Probability-Weighted Expected Return Method
 
Probability Weighting of Alternative Outcomes
 
0%-100.00%
 
 
Warrant investments
 
20,752

 
Black Scholes Option Pricing Model
 
Revenue Multiples
 
1.50x - 94.7x
 
7.21x
 
 
 
 
 
 
Volatility
 
30.0% - 61.7%
 
57.86%
 
 
 
 
 
 
Term
 
2.00 - 4.00 Years
 
3.00 Years
 
 
 
 
 
 
Discount for Lack of Marketability
 
0.00% - 27.50%
 
26.55%
 
 
 
 
 
 
Risk Free Rate
 
1.56% - 1.70%
 
1.61%
 
 
27

 
Option-Pricing Method and Probability-Weighted Expected Return Method
 
Weighted Average Cost of Capital
 
27.50%
 
27.50%
 
 
 
 
 
 
Term
 
2.00 - 3.50 Years
 
3.21 Years
 
 
1,311

 
Discounted Expected Return
 
Discount Rate
 
18.00% - 35.00%
 
30.94%
 
 
 
 
 
 
Term
 
2.40 - 4.00 Years
 
2.69 Years
 
 
 
 
 
 
Expected Recovery Rate
 
50.00% - 80.00%
 
65.91%
Equity investments
 
9,340

 
Black Scholes Option Pricing Model
 
Revenue Multiples
 
0.85x - 10.25x
 
4.13x
 
 
 
 
 
 
Volatility
 
30.00% - 80.00%
 
58.30%
 
 
 
 
 
 
Term
 
1.50 - 4.00 Years
 
3.03 Years
 
 
 
 
 
 
Discount for Lack of Marketability
 
0.00% - 5.00%
 
5.00%
 
 
 
 
 
 
Risk Free Rate
 
1.40% - 1.70%
 
1.62%
 
 
592

 
Option-Pricing Method and Probability-Weighted Expected Return Method
 
Weighted Average Cost of Capital
 
27.50% - 32.50%
 
30.37%
 
 
 
 
 
 
Term
 
3.50 Years
 
3.50 Years
 
 
1,236

 
Discounted Expected Recovery
 
Expected Recovery Rate
 
50.98%
 
50.98%
Total investments
 
$
637,776

 
 
 
 
 
 
 
 

Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.
Note 5. Credit Risk
Debt investments may be affected by business, financial market or legal uncertainties. Prices of investments may be volatile, and a variety of factors that are inherently difficult to predict, such as domestic, economic and political developments, may significantly affect the value of these investments. In addition, the value of these investments may fluctuate as the general level of interest rates fluctuate.
In many instances, the portfolio company’s ability to repay the debt investments is dependent on additional funding by its venture capital investors, a future sale or an initial public offering. The value of these investments may be detrimentally affected to the extent a borrower defaults on its obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan.
Note 6. Borrowings
The following table shows the Company's outstanding debt as of June 30, 2020 and December 31, 2019:
Liability
(in thousands)
 
June 30, 2020
 
December 31, 2019
 
Total Commitment
 
Balance Outstanding
 
Unused Commitment
 
Total Commitment
 
Balance Outstanding
 
Unused Commitment
Revolving Credit Facility
 
$
300,000

 
$
158,000

 
$
142,000

 
$
300,000

 
$
262,300

 
$
37,700

2022 Notes
 
74,750

 
74,750

 

 
74,750

 
74,750

 

2025 Notes
 
70,000

 
70,000

 

 

 

 

Total before deferred financing and issuance costs
 
444,750

 
302,750

 
142,000

 
374,750

 
337,050

 
37,700

Unamortized deferred financing and issuance costs
 

 
(3,029
)
 

 

 
(2,899
)
 

Total borrowings outstanding, net of deferred financing and issuance costs
 
$
444,750

 
$
299,721

 
$
142,000

 
$
374,750

 
$
334,151

 
$
37,700


33


Interest expense on these borrowings includes the interest cost charged on borrowings, the unused fee on the Credit Facility (as defined below), paying and administrative agent fees, and the amortization of deferred Credit Facility fees and expenses and costs and fees relating to the Company's unsecured notes outstanding. These expenses are shown in the table below:
Interest Expense and Amortization of Fees
(in thousands)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Revolving Credit Facility
 
 
 
 
 
 
 
 
Interest cost
 
$
1,828

 
$
1,364

 
$
4,252

 
$
1,852

Unused fee
 
107

 
162

 
208

 
381

Amortization of costs and other fees
 
332

 
275

 
648

 
564

Revolving Credit Facility Total
 
$
2,267

 
$
1,801

 
$
5,108

 
$
2,797

2022 Notes
 
 
 
 
 
 
 
 
Interest cost
 
$
1,075

 
$
1,075

 
$
2,149

 
$
2,150

Amortization of costs and other fees
 
133

 
134

 
265

 
266

2022 Notes Total
 
$
1,208

 
$
1,209

 
$
2,414

 
$
2,416

2025 Notes
 
 
 
 
 
 
 
 
Interest cost
 
$
787

 
$

 
$
902

 
$

Amortization of costs and other fees
 
50

 

 
50

 

2025 Notes Total
 
$
837

 
$

 
$
952

 
$

Total interest expense and amortization of fees
 
$
4,312

 
$
3,010

 
$
8,474

 
$
5,213

Credit Facility
In February 2014, the Company, along with its Financing Subsidiary as borrower, entered into a credit agreement with Deutsche Bank AG, acting as administrative agent and a lender, and KeyBank National Association, TIAA Bank, and AloStar Bank of Commerce, as other lenders, which provided the Company with a $150.0 million commitment, subject to borrowing base requirements (as amended and restated from time to time, the “Credit Facility”). In August 2014, the Company amended the Credit Facility to increase the total commitments available thereunder to $200 million in aggregate. In January 2018, the Company amended and renewed the Credit Facility, which, among other things, increased the total commitment by $10 million to $210 million and replaced AloStar Bank of Commerce with MUFG Union Bank, N.A as a lender. In May 2019, the Company amended and renewed the Credit Facility, which, among other things, (i) increased the total commitment by $55 million to $265 million, (ii) added an accordion feature under the Credit Facility, which allows the Company to increase the size of the Credit Facility to an amount not to exceed $400 million; and (iii) extended the revolving period of the Credit Facility from February 21, 2020 to May 31, 2021 and the maturity date of the Credit Facility from August 21, 2021 to November 30, 2022. In August 2019, the Company amended the Credit Facility to (i) increase its total commitments from $265 million to $300 million and (ii) add two new lenders, Hitachi Capital America Corporation and NBH Bank. The $35 million increase in total commitments to the Credit Facility was made under the accordion feature in the Credit Facility.
Borrowings under the Credit Facility bear interest at the sum of (i) a floating rate based on certain indices, including LIBOR and commercial paper rates, plus (ii) a margin of 2.80% if facility utilization is greater than or equal to 75%, 2.90% if utilization is greater than or equal to 50%, 3.00% if utilization is less than 50% and 4.5% during the amortization period. Borrowings under the Credit Facility are secured only by the assets of the Financing Subsidiary. The Company agreed to pay Deutsche Bank AG a syndication fee and to pay to Deutsche Bank AG a fee to act as administrative agent under the Credit Facility as well as to pay each lender (i) a commitment fee based on each lender’s commitment and (ii) a fee of 0.50% per annum for any unused borrowings under the Credit Facility on a monthly basis. The Credit Facility contains affirmative and restrictive covenants including, but not limited to, an advance rate limitation of 55.0% of the applicable balance of net assets held by the Financing Subsidiary, maintenance of minimum net worth, a ratio of total assets to total indebtedness of not less than the greater of 3:2 and the amount so required under the 1940 Act, a key man clause relating to the Company’s Chief Executive Officer, James P. Labe, and the Company’s President and Chief Investment Officer, Sajal K. Srivastava, and eligibility requirements, including but not limited to geographic and industry concentration limitations and certain loan grade classifications. Furthermore, events of default under the Credit Facility include, among other things, (i) a payment default; (ii) a change of control; (iii) bankruptcy; (iv) a covenant default; and (v) failure by the Company to maintain its qualification as a BDC under the 1940 Act. As of June 30, 2020 and December 31, 2019, the Company was in compliance with all covenants under the Credit Facility.
During the six months ended June 30, 2020, gross borrowings and gross repayments under the Credit Facility were $74.0 million and $178.3 million, respectively. During the six months ended June 30, 2019, gross borrowings and gross repayments under the Credit Facility were $172.0 million and $109.2 million, respectively. At June 30, 2020 and December 31, 2019, the Company had outstanding borrowings under the Credit Facility of $158.0 million and $262.3 million, respectively, excluding deferred credit facility costs of $1.0 million and $1.6 million, respectively, which is included in the Company’s consolidated statements of assets and liabilities. The book value of the Credit Facility approximates fair value due to the relatively short maturity, cash repayments and market interest rates of the instrument. The fair value of the Credit Facility would be categorized as Level 3 of the fair value hierarchy if determined as of the reporting date.
During the three and six months ended June 30, 2020, the Company had average outstanding borrowings under the Credit Facility of $215.4 million and $218.0 million, respectively, at a weighted average interest rate of 3.61% and 4.11%, respectively. During the three and six months ended June 30, 2019, the Company had average outstanding borrowings under the Credit Facility of $100.3 million and $68.1 million, respectively, at a weighted average interest rate of 5.38% and 5.41%, respectively.

34


As of June 30, 2020 and December 31, 2019, $604.9 million and $581.2 million, respectively, of the Company’s assets were pledged for borrowings under the Credit Facility.
2022 Notes
On July 14, 2017, the Company completed a public offering of $65.0 million in aggregate principal amount of its 5.75% notes due 2022 (the “2022 Notes”) and received net proceeds of $62.8 million after the payment of fees and offering costs. On July 24, 2017, as a result of the underwriters’ full exercise of their option to purchase additional 2022 Notes, the Company issued an additional $9.75 million in aggregate principal amount of the 2022 Notes and received net proceeds of $9.5 million after the payment of fees and offering costs. The interest on the 2022 Notes is payable quarterly on January 15, April 15, July 15 and October 15. The 2022 Notes are listed on the NYSE under the symbol “TPVY”. The 2022 Notes were issued in units of $25.
The 2022 Notes mature on July 15, 2022. The 2022 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option at a redemption price of 100% of the outstanding principal amount of the 2022 Notes plus all accrued and unpaid interest. The 2022 Notes are unsecured obligations and rank pari passu, or equal in right of payment, with any of the Company’s future unsecured indebtedness; senior to any of the Company’s future indebtedness that expressly provides it is subordinated to the 2022 Notes; effectively subordinated to all of the Company’s future secured indebtedness (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness; and structurally subordinated to all of the Company’s existing and future indebtedness and other obligations of any subsidiaries, financing vehicles, or similar facilities the Company may form in the future, with respect to claims on the assets of any such subsidiaries, financing vehicles, or similar facilities, including, without limitation, borrowings under the Credit Facility.
The indenture governing the 2022 Notes contains certain covenants, including covenants (i) requiring the Company's compliance with the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a) of the 1940 Act, whether or not the Company is subject to the such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the SEC; (ii) if the Company’s asset coverage has been below the 1940 Act minimum asset coverage requirements (after giving effect to any exemptive relief granted to the Company by the SEC) for more than six consecutive months, prohibiting the declaration of any cash dividend or distribution on the Company’s common stock (except to the extent necessary for the Company to maintain its treatment as a RIC under Subchapter M of the Code), or purchasing any of the Company’s common stock, unless, at the time of the declaration of the dividend or distribution or the purchase, and after deducting the amount of such dividend, distribution, or purchase, the Company is in compliance with the 1940 Act asset coverage requirements (after giving effect to any exemptive relief granted to us by the SEC); and (iii) requiring the Company to provide financial information to the trustee, if the Company ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. These covenants are subject to limitations and exceptions that are described in the indenture. As of June 30, 2020, the Company was in compliance with these covenants.
At June 30, 2020, the 2022 Notes had a market price of $24.07 per unit, resulting in an aggregate fair value of $72.0 million. The 2022 Notes are recorded at amortized cost in the consolidated statements of assets and liabilities. Amortized cost includes $1.0 million of deferred issuance cost at June 30, 2020, which is amortized and expensed over the five-year term of the 2022 Notes based on a straight-line method.
2025 Notes
On March 19, 2020, the Company completed a private debt offering of $70.0 million in aggregate principal amount of its 4.50% unsecured notes due March 19, 2025 (the “2025 Notes”) in reliance on Section 4(a)(2) of the Securities Act. The interest on the 2025 Notes is payable semiannually on March 19 and September 19 each year, beginning on September 19, 2020.
The 2025 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if applicable, a make-whole premium. In addition, the Company is obligated to offer to prepay the 2025 Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. The 2025 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company; provided however, in the event that the Company or a subsidiary guarantor (which excludes financing subsidiaries) creates, incurs, assumes or permits to exist liens of more than an aggregate principal amount of $25 million on or with respect to any of their property or assets in connection with future secured indebtedness, the 2025 Notes will generally become secured concurrently therewith, equally and ratably with such indebtedness.
The Master Note Purchase Agreement (the “Note Purchase Agreement”) under which the 2025 Notes were issued contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, a minimum asset coverage ratio of 1.50 to 1.00, a minimum interest coverage ratio of 1.25 to 1.00, and minimum stockholders’ equity of $216,129,000, as adjusted upward by an amount equal to 65% of the net proceeds from the issuance of shares of the Company’s common stock subsequent to December 31, 2019. In addition, in the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, the 2025 Notes will bear interest at a fixed rate of 5.50% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event is no longer continuing.
The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness of the Company or subsidiary guarantors, certain judgments and orders, certain events of bankruptcy, and breach of a key man clause relating to the Company’s Chief Executive Officer, James P. Labe, and the Company’s President and Chief Investment Officer, Sajal K. Srivastava.

35


The 2025 Notes are recorded at amortized cost in the consolidated statements of assets and liabilities. Amortized cost includes $1.0 million of deferred issuance cost at June 30, 2020, which is amortized and expensed over the five-year term of the 2025 Notes based on a straight-line method. The book value of the 2025 Notes approximates fair value and would be categorized as Level 3 of the fair value hierarchy if determined as of the reporting date.
The following table shows additional information about the level in the fair value hierarchy of the Company’s liabilities as of June 30, 2020 and December 31, 2019:
Liability
(in thousands)
 
June 30, 2020
 
December 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Revolving Credit Facility
 
$

 
$

 
$
158,000

 
$
158,000

 
$

 
$

 
$
262,300

 
$
262,300

2022 Notes, net(1)
 

 
73,709

 

 
73,709

 

 
73,454

 

 
73,454

2025 Notes, net(2)
 

 

 
69,047

 
69,047

 

 

 

 

Total
 
$

 
$
73,709

 
$
227,047

 
$
300,756

 
$

 
$
73,454

 
$
262,300

 
$
335,754

_______________
(1)
Net of debt issuance costs as of June 30, 2020 and December 31, 2019 of $1.0 million and $1.0 million, respectively.
(2)
Net of debt issuance costs as of June 30, 2020 of $1.0 million.
Adviser Revolver
On May 6, 2020, the Company entered into an unsecured revolving loan agreement with the Adviser (the “Adviser Revolver”), which has a maximum credit limit of $50.0 million, with $25.0 million currently available and an accordion feature for an additional $25.0 million in commitments from the Adviser. Any advance of funds under the Adviser Revolver, and any exercise of the accordion feature, must be approved by the Adviser in advance in its sole discretion. The Adviser Revolver expires on December 31, 2020, and borrowings thereunder bear an annual interest rate of 6.0%, payable quarterly. Any of the Company’s obligations under the Adviser Revolver are unsecured and are expressly subordinated and junior in right of payment to all of the Company’s other indebtedness for borrowed funds. As of June 30, 2020, the Company had no outstanding borrowings under the Adviser Revolver.
Note 7. Commitments and Contingencies
Commitments
As of June 30, 2020 and December 31, 2019, the Company’s unfunded commitments totaled $180.4 million to 14 portfolio companies and $226.1 million to 16 portfolio companies, respectively, of which $33.3 million and $59.3 million, respectively, was dependent upon the portfolio companies reaching certain milestones before the debt commitment becomes available to them. As of June 30, 2020, of the $180.4 million of unfunded commitments, $151.3 million will expire during 2020 and $29.0 million will expire during 2021.
The Company’s credit agreements contain customary lending provisions that allow it relief from funding obligations for previously made commitments in instances where the underlying company experiences material adverse events that affect the financial condition or business outlook for the company. Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for the Company.

36


The table below shows the Company’s unfunded commitments by portfolio company as of June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
December 31, 2019
Unfunded Commitments(1)
(in thousands)
 
Unfunded Commitments
 
Fair Value of Unfunded Commitment Liability
 
Unfunded Commitments
 
Fair Value of Unfunded Commitment Liability
BlueVine Capital, Inc.
 
$
30,000

 
$

 
$
30,000

 
$

Capsule Corp.
 
30,000

 
404

 
10,000

 
179

Cohesity, Inc.
 
30,000

 
142

 

 

Hims, Inc.
 
25,000

 
198

 
25,000

 
198

Freshly Inc.
 
15,000

 

 
18,000

 
168

OfferUp Inc.
 
10,000

 
192

 
20,000

 
192

Transfix, Inc.
 
10,000

 
194

 
10,000

 
194

Curology, Inc.
 
9,000

 
44

 
15,000

 
35

Grove Collaborative, Inc.
 
5,333

 
81

 
21,750

 
407

Pencil and Pixel, Inc.
 
5,000

 

 

 

Signifyd, Inc.
 
4,000

 
93

 
10,000

 
182

Farmer's Business Network, Inc.
 
3,034

 
18

 

 

Sonder USA, Inc.
 
3,000

 
25

 
8,333

 
98

Mind Candy Limited
 
1,000

 

 

 

Envoy, Inc.
 

 
105

 

 

Outfittery GMBH
 

 
58

 

 

Toast, Inc.
 

 

 
35,000

 
115

Moda Operandi, Inc.
 

 

 
10,000

 
200

Nurx Inc.
 

 

 
5,000

 

OneSource Virtual, Inc.
 

 

 
5,000

 

Brooklinen, Inc.
 

 

 
3,000

 
174

GoEuro Corp.
 

 

 

 
35

Total
 
$
180,367

 
$
1,554

 
$
226,083

 
$
2,177

_______________
(1)
Does not include $9.1 million and $15.5 million backlog of potential future commitments as of June 30, 2020 and December 31, 2019, respectively. Refer to the “Backlog of Potential Future Commitments” below.
The table above also shows the fair value of the Company’s unfunded commitment liability totaling $1.6 million and $2.2 million as of June 30, 2020 and December 31, 2019, respectively. The fair value at the inception of the delay draw credit agreements is equal to the fees and warrants received to enter into these agreements, taking into account the remaining terms of the agreements and the counterparties’ credit profile. The unfunded commitment liability reflects the fair value of these future funding commitments and is included in “Other accrued expenses and liabilities” in the Company’s consolidated statements of assets and liabilities.
These liabilities are considered Level 3 liabilities under ASC Topic 820 as there is no known or accessible market or market indices for these types of financial instruments. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. The following table shows additional details regarding the Company's unfunded commitment activity during the three and six months ended June 30, 2020 and 2019:
Commitments Activity
(in thousands)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Activity during the period:
 
 
 
 
 
 
 
 
New commitments(1)
 
$
13,915

 
$
98,364

 
$
116,488

 
$
289,324

Fundings
 
(20,507
)
 
(72,539
)
 
(99,267
)
 
(162,056
)
Expirations / Terminations
 
(14,000
)
 
(50,000
)
 
(69,333
)
 
(91,000
)
Foreign currency adjustments
 
(1
)
 

 
19

 

Unfunded commitments at beginning of period(2)
 
$
208,983

 
$
379,749

 
$
226,083

 
$
294,306

Unfunded commitments at end of period(2)
 
$
180,367

 
$
350,074

 
$
180,367

 
$
350,074

 
 
 
 
 
 
 
 
 
Backlog of potential future commitments
 
$
9,123

 
$
5,500

 
$
9,123

 
$
5,500

_______________
(1)
Includes backlog of potential future commitments. Refer to the “Backlog of Potential Future Commitments” below.
(2)
Does not include backlog of potential future commitments. Refer to the “Backlog of Potential Future Commitments” below.

37


The following table shows additional information on the Company’s unfunded commitments regarding milestones and expirations as of June 30, 2020 and December 31, 2019:
Unfunded Commitments(1)
(in thousands)
 
June 30, 2020
 
December 31, 2019
Dependent on milestones
 
$
33,333

 
$
59,333

Expiring during:
 
 
 
 
2020
 
$
151,333

 
$
188,083

2021
 
29,034

 
38,000

Unfunded Commitments
 
$
180,367

 
$
226,083

_______________
(1)
Does not include backlog of potential future commitments. Refer to the “Backlog of Potential Future Commitments” below.
Backlog of Potential Future Commitments
The Company entered into commitments with certain portfolio companies that permit an increase in the commitment amount in the future in the event that certain conditions to make such increases are met. If such conditions to increase are met, these amounts may become unfunded commitments, if not drawn prior to expiration. As of June 30, 2020 and December 31, 2019, this backlog of potential future commitments totaled $9.1 million and $15.5 million, respectively.
Note 8. Financial Highlights
The financial highlights shown below are for the six months ended June 30, 2020 and 2019:
Financial Highlights
(in thousands, except per share data)
 
For the Six Months Ended June 30, or as of June 30,
 
2020
 
2019
Per Share Data(1)
 
 
 
 
Net asset value at beginning of period
 
$
13.34

 
$
13.50

Changes in net asset value due to:
 
 
 
 
Net investment income
 
0.78

 
0.81

Net realized gains (losses) on investments
 
0.02

 

Net change in unrealized gains (losses) on investments
 
(0.27
)
 
0.60

Net increase (decrease) from capital share transactions(1)
 
0.02

 

Distributions from net investment income
 
(0.72
)
 
(0.72
)
Net asset value at end of period
 
$
13.17

 
$
14.19

 
 
 
 
 
Net investment income per share
 
$
0.78

 
$
0.81

Net increase (decrease) in net assets resulting from operations per share
 
$
0.53

 
$
1.41

Weighted average shares of common stock outstanding for period
 
30,315

 
24,805

Shares of common stock outstanding at end of period
 
30,784

 
24,859

 
 
 
 
 
Ratios / Supplemental Data
 
 
 
 
Net asset value at beginning of period
 
$
332,506

 
$
334,531

Net asset value at end of period
 
$
405,523

 
$
352,652

Average net asset value
 
$
403,421

 
$
337,366

Stock price at end of period
 
$
10.28

 
$
14.23

 
 
 
 
 
Total return based on net asset value per share(2)
 
8.9
 %
 
10.9
%
Total return based on stock price(3)
 
(20.3
)%
 
37.9
%
 
 
 
 
 
Net investment income to average net asset value(4)
 
11.9
 %
 
12.0
%
Net increase (decrease) in net assets to average net asset value(4)
 
8.0
 %
 
20.9
%
Ratio of expenses to average net asset value(4)
 
10.4
 %
 
9.8
%
Operating expenses excluding incentive fees to average net asset value(4)
 
9.0
 %
 
6.8
%
Income incentive fees to average net asset value(4)
 
1.4
 %
 
3.0
%
Capital gains incentive fees to average net asset value(4)
 
0.0
 %
 
0.0
%
_______________

38


(1)
All per share activity is calculated based on the weighted average shares outstanding for the relevant period, except net increase (decrease) in net assets from capital share transactions, which is based on the common shares outstanding as of the relevant balance sheet date.
(2)
Total return based on NAV is the change in ending NAV per share plus distributions per share paid during the period assuming participation in the Company’s dividend reinvestment plan divided by the beginning NAV per share.
(3)
Total return based on stock price is the change in the ending stock price of the Company’s common stock plus distributions paid during the period assuming participation in the Company’s dividend reinvestment plan divided by the beginning stock price of the Company’s common stock. The total return is for the period shown and is not annualized.
(4)
Percentage is presented on an annualized basis.
The weighted average portfolio yield on total debt investments shown below is for the six months ended June 30, 2020 and 2019:
Ratios
(Percentages, on an annualized basis)(1)
 
For the Six Months Ended June 30, or as of June 30,
 
2020
 
2019
Weighted average portfolio yield on total debt investments(2)
 
13.2
%
 
16.4
%
Coupon income
 
10.0
%
 
10.6
%
Accretion of discount
 
1.0
%
 
0.9
%
Accretion of end-of-term payments
 
1.7
%
 
2.2
%
Impact of prepayments during the period
 
0.5
%
 
2.7
%
 
 
 
 
 
Prime Rate at end of period(3)
 
3.25
%
 
5.50
%
_______________
(1)
Weighted average portfolio yields on total debt investments for periods shown are the annualized rates of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period.
(2)
The weighted average portfolio yields on total debt investments reflected above do not represent actual investment returns to the Company's stockholders.
(3)
Included as a reference point for coupon income and weighted average portfolio yield.
Note 9. Net Increase (Decrease) in Net Assets per Share
The following table shows the computation of basic and diluted net increase (decrease) in net assets per share for the three and six months ended June 30, 2020 and 2019:
Basic and Diluted Share Information
(in thousands, except per share data)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Net investment income
 
$
11,536

 
$
10,123

 
$
23,773

 
$
20,038

Net increase (decrease) in net assets resulting from operations
 
$
21,222

 
$
23,861

 
$
16,104

 
$
34,930

Basic and diluted weighted average shares of common stock outstanding
 
30,747

 
24,827

 
30,315

 
24,805

Basic and diluted net investment income per share of common stock
 
$
0.38

 
$
0.41

 
$
0.78

 
$
0.81

Basic and diluted net increase (decrease) in net assets resulting from operations per share of common stock
 
$
0.69

 
$
0.96

 
$
0.53

 
$
1.41

Note 10.    Equity
Since inception through June 30, 2020, the Company has issued 30,837,545 shares of common stock through an initial public offering and a concurrent private placement offering in 2014, a registered follow-on offering in 2015, a private placement offering in 2017, a registered follow-on offering and concurrent private placement offering in 2018, and a registered follow-on offering in 2020. The Company received net proceeds from these offerings of $432.9 million, net of the portion of the underwriting sales load and offering costs paid by the Company.
The Company has adopted a dividend reinvestment plan for its stockholders, which is an “opt out” dividend reinvestment plan. Under this plan, if the Company declares a cash distribution to stockholders, the amount of such distribution is automatically reinvested in additional shares of common stock unless a stockholder specifically “opts out” of the dividend reinvestment plan. If a stockholder opts out, that stockholder receives cash distributions.

39


The following tables show information on the proceeds raised along with any related underwriting sales load and associated offering expenses, and the price at which common stock was issued by the Company, during the six months ended June 30, 2020 and the year ended December 31, 2019:
Issuance of Common Stock for the Six Months Ended June 30, 2020 (in thousands, except per share data)
 
Date
 
Number of Shares of 
Common Stock Issued
 
Gross Proceeds Raised
 
Underwriting Sales Load
 
Offering Expenses
 
Gross Offering Price
Public follow-on
 
1/13/2020
 
5,000

 
$
70,400

 
$
2,150

 
$
218

 
$14.08 per share
Public follow-on (over-allotment)
 
1/17/2020
 
750

 
10,560

 
323

 
33

 
$14.08 per share
First quarter 2020 distribution reinvestment
 
3/30/2020
 
73

 
413

 

 

 
$5.63 per share
Second quarter 2020 distribution reinvestment
 
6/30/2020
 
38

 
373

 

 

 
$9.77 per share
Total issuance
 
 
 
5,861

 
$
81,746

 
$
2,473

 
$
251

 
 
Issuance of Common Stock for the Year Ended December 31, 2019 (in thousands, except per share data)
 
Date
 
Number of Shares of 
Common Stock Issued
 
Gross Proceeds Raised
 
Underwriting Sales Load
 
Offering Expenses
 
Gross Offering Price
First quarter 2019 distribution reinvestment
 
3/29/2019
 
40

 
$
519

 
$

 
$

 
$13.07 per share
Second quarter 2019 distribution reinvestment
 
6/14/2019
 
39

 
528

 

 

 
$13.40 per share
Third quarter 2019 distribution reinvestment
 
9/16/2019
 
35

 
555

 

 

 
$15.68 per share
Fourth quarter 2019 distribution reinvestment
 
12/16/2019
 
28

 
382

 

 

 
$13.64 per share
Total issuance
 
 
 
142

 
$
1,984

 
$

 
$

 
 
The Company had 30,784,352 and 24,922,762 shares of common stock outstanding as of June 30, 2020 and December 31, 2019, respectively.
Note 11. Distributions
The Company has elected to be treated, and intends to comply with the requirements to continue to qualify annually, as a RIC under the Code. In order to maintain its ability to be subject to tax as a RIC, among other things, the Company is required to distribute at least 90% of its net ordinary income and net realized short-term capital gains in excess of its net realized long-term capital losses, if any, to its stockholders. Additionally, to avoid a nondeductible 4% U.S. federal excise tax on certain of the Company’s undistributed income, the Company must distribute during each calendar year an amount at least equal to the sum of: (a) 98% of the Company’s ordinary income (not taking into account any capital gains or losses) for such calendar year; (b) 98.2% of the amount by which the Company’s capital gains exceed the Company’s capital losses (adjusted for certain ordinary losses) for a one-year period ending on October 31 of the calendar year (unless an election is made by the Company to use its taxable year); and (c) certain undistributed amounts from previous years on which the Company paid no U.S. federal income tax.
For the tax years ended December 31, 2019, 2018, 2017, 2015 and 2014, the Company was subject to a 4% U.S. federal excise tax and the Company may be subject to this tax in future years. In such cases, the Company is liable for the tax only on the amount by which the Company does not meet the foregoing distribution requirement. The character of income and gains that the Company distributes is determined in accordance with income tax regulations that may differ from GAAP. Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax differences are reclassified to paid-in capital. The Company incurred a non-deductible U.S. federal excise tax of $259,000 for the year ended December 31, 2019.
The following table shows the Company's cash distributions per share that have been authorized by the Board since the Company's initial public offering to June 30, 2020. From March 5, 2014 (commencement of operations) to December 31, 2015, and during the years ended December 31, 2017 and December 31, 2018, distributions represent ordinary income as the Company's earnings exceeded distributions. Approximately $0.24 per share of the distributions during the year ended December 31, 2016 represented a return of capital. During the year ended December 31, 2019, distributions represent ordinary income and long term capital gains.

40


Period Ended
 
Date Announced
 
Record Date
 
Payment Date
 
Per Share Amount
March 31, 2014
 
April 3, 2014
 
April 15, 2014
 
April 30, 2014
 
$
0.09

(1) 
June 30, 2014
 
May 13, 2014
 
May 30, 2014
 
June 17, 2014
 
0.30

 
September 30, 2014
 
August 11, 2014
 
August 29, 2014
 
September 16, 2014
 
0.32

 
December 31, 2014
 
October 27, 2014
 
November 28, 2014
 
December 16, 2014
 
0.36

 
December 31, 2014
 
December 3, 2014
 
December 22, 2014
 
December 31, 2014
 
0.15

(2) 
March 31, 2015
 
March 16, 2015
 
March 26, 2015
 
April 16, 2015
 
0.36

 
June 30, 2015
 
May 6, 2015
 
May 29, 2015
 
June 16, 2015
 
0.36

 
September 30, 2015
 
August 11, 2015
 
August 31, 2015
 
September 16, 2015
 
0.36

 
December 31, 2015
 
November 10, 2015
 
November 30, 2015
 
December 16, 2015
 
0.36

 
March 31, 2016
 
March 14, 2016
 
March 31, 2016
 
April 15, 2016
 
0.36

 
June 30, 2016
 
May 9, 2016
 
May 31, 2016
 
June 16, 2016
 
0.36

 
September 30, 2016
 
August 8, 2016
 
August 31, 2016
 
September 16, 2016
 
0.36

 
December 31, 2016
 
November 7, 2016
 
November 30, 2016
 
December 16, 2016
 
0.36

 
March 31, 2017
 
March 13, 2017
 
March 31, 2017
 
April 17, 2017
 
0.36

 
June 30, 2017
 
May 9, 2017
 
May 31, 2017
 
June 16, 2017
 
0.36

 
September 30, 2017
 
August 8, 2017
 
August 31, 2017
 
September 15, 2017
 
0.36

 
December 31, 2017
 
November 6, 2017
 
November 17, 2017
 
December 1, 2017
 
0.36

 
March 31, 2018
 
March 12, 2018
 
March 23, 2018
 
April 6, 2018
 
0.36

 
June 30, 2018
 
May 2, 2018
 
May 31, 2018
 
June 15, 2018
 
0.36

 
September 30, 2018
 
August 1, 2018
 
August 31, 2018
 
September 14, 2018
 
0.36

 
December 31, 2018
 
October 31, 2018
 
November 30, 2018
 
December 14, 2018
 
0.36

 
December 31, 2018
 
December 6, 2018
 
December 20, 2018
 
December 28, 2018
 
0.10

(2) 
March 31, 2019
 
March 1, 2019
 
March 20, 2019
 
March 29, 2019
 
0.36

 
June 30, 2019
 
May 1, 2019
 
May 31, 2019
 
June 14, 2019
 
0.36

 
September 30, 2019
 
July 31, 2019
 
August 30, 2019
 
September 16, 2019
 
0.36

 
December 31, 2019
 
October 30, 2019
 
November 29, 2019
 
December 16, 2019
 
0.36

 
March 31, 2020
 
February 28, 2020
 
March 16, 2020
 
March 30, 2020
 
0.36

 
June 30, 2020
 
April 30, 2020
 
June 16, 2020
 
June 30, 2020
 
0.36

 
Total cash distributions
 
 
 
 
 
 
 
$
9.24

 
_______________
(1)
The amount of this initial distribution reflected a quarterly distribution rate of $0.30 per share, prorated for the 27 days for the period from the pricing of the Company’s initial public offering on March 5, 2014 through March 31, 2014.
(2)
Represents a special distribution.
It is the Company’s intention to distribute all or substantially all of its taxable income earned over the course of the year; thus, no provision for income tax has been recorded in the Company's consolidated statements of operations during the three and six months ended June 30, 2020 and 2019. However, the Company may choose not to distribute all of its taxable income for a number of reasons, including retaining excess taxable income for investment purposes and/or defer the payment of distributions associated with the excess taxable income for future calendar years. For the three and six months ended June 30, 2020, total distributions of $0.36 per share and $0.72 per share, respectively, were declared and paid and represented a distribution of ordinary income as a result of the Company’s earnings and profits exceeding its distributions. As of June 30, 2020, the Company estimated it had undistributed taxable earnings (or “Spillover Income”) of $8.9 million, or $0.29 per share. Since March 5, 2014 (commencement of operations) to June 30, 2020, total distributions of $9.24 per share have been paid.
Note 12. Subsequent Events
Dividends
On July 30, 2020, the Board declared a $0.36 per share regular quarterly distribution, payable on September 15, 2020 to stockholders of record on August 31, 2020.
Recent Portfolio Activity
From July 1, 2020 through August 4, 2020, the Company closed $22.0 million of additional debt commitments and funded $3.9 million in new investments. TPC’s direct originations platform entered into $43.2 million of additional non-binding signed term sheets with venture growth stage companies, subject to due diligence, definitive documentation and investment committee approval, as well as compliance with TPC’s allocation policy. From July 1, 2020 through August 4, 2020, the Company received $29.1 million of principal prepayments generating approximately $1.0 million of prepayment fees and interest income.

41


Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
The information contained in this section should be read in conjunction with our consolidated financial statements and related notes and schedules thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Except as otherwise specified, references to “the Company”, “we”, “us”, and “our” refer to TriplePoint Venture Growth BDC Corp. and its subsidiaries.
This Quarterly Report on Form 10-Q contains 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,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this Quarterly Report on Form 10-Q include statements as to:
our and our portfolio companies’ future operating results and financial condition, including the ability of us and our portfolio companies to achieve our respective objectives;
our business prospects and the prospects of our portfolio companies;
our relationships with third parties, including but not limited to lenders and venture capital investors, including other investors in our portfolio companies;
the impact and timing of our unfunded commitments;
the expected market for venture capital investments;
the performance of our existing portfolio and other investments we may make in the future;
the impact of investments that we expect to make;
actual and potential conflicts of interest with TriplePoint Capital LLC (“TPC”), TriplePoint Advisers LLC (“Adviser”) and its senior investment team and Investment Committee;
our contractual arrangements and relationships with third parties;
the dependence of our future success on the U.S. and global economies, including with respect to the industries in which we invest;
our expected financings and investments;
the ability of our Adviser to attract, retain and have access to highly talented professionals, including our Adviser’s senior management team;
our ability to qualify and maintain our qualification as a RIC and as a BDC;
the adequacy of our available liquidity, cash resources and working capital and compliance with covenants under our borrowing arrangements; and
the timing of cash flows, if any, from the operations of our portfolio companies.
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 without limitation:
changes in laws and regulations, changes in political, economic or industry conditions, and changes in the interest rate environment or other conditions affecting the financial and capital markets, including with respect to changes resulting from or in response to, or potentially even the absence of changes as a result of, the impact of the Coronavirus (“COVID-19”) pandemic;
the length and duration of the COVID-19 outbreak in the United States as well as worldwide, and the magnitude of its impact and time required for economic recovery, including with respect to the impact of travel restrictions and other isolation and quarantine measures on the ability of the Adviser’s investment professionals to conduct in-person diligence on, and otherwise monitor, existing and future investments;
an economic downturn and the time period required for robust economic recovery therefrom, including the current economic downturn as a result of the impact of the COVID-19 pandemic, which has already generally had a material impact on our portfolio companies’ results of operations and financial condition and will likely continue to have a material impact on our portfolio companies’ results of operations and financial condition, for its duration, which could lead to the loss of some or all of our investments in such portfolio companies and have a material adverse effect on our results of operations and financial condition;
a contraction of available credit, an inability or unwillingness of our lenders to fund their commitments to us and/or an inability to access capital markets or additional sources of liquidity, including as a result of the impact and duration of the COVID-19 pandemic, could have a material adverse effect on our results of operations and financial condition and impair our lending and investment activities;

42


interest rate volatility could adversely affect our results, particularly given that we use leverage as part of our investment strategy;
currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;
risks associated with possible disruption in our or our portfolio companies’ operations due to wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics; and
the risks, uncertainties and other factors we identify in “Risk Factors” in our most recent Annual Report on Form 10-K under Part I, Item 1A, in our quarterly reports on Form 10-Q, including this report, and in our other filings with the SEC that we make from time to time.
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include, without limitation, our ability to originate new loans and investments, borrowing costs and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q.
Overview
We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. We have elected to be treated, and intend to qualify annually, as a RIC under Subchapter M of the Code for U.S. federal income tax purposes.
Our shares are currently listed on the New York Stock Exchange (the “NYSE”) under the symbol “TPVG”. The 2022 Notes are currently listed on the NYSE under the symbol “TPVY”.
We were formed to expand the venture growth stage business segment of TPC’s investment platform. TPC is widely recognized as a leading global financing provider devoted to serving venture capital-backed companies with creative, flexible and customized debt financing, equity capital and complementary services throughout their lifespan. TPC is located on Sand Hill Road in Silicon Valley and has a primary focus in technology, life sciences and other high growth industries.
Our investment objective is to maximize our total return to stockholders primarily in the form of current income and, to a lesser extent, capital appreciation by lending primarily with warrants to venture growth stage companies focused in technology, life sciences and other high growth industries backed by TPC’s select group of leading venture capital investors.
We commenced investment activities on March 5, 2014. In order to expedite the ramp-up of our investment activities and further our ability to meet our investment objectives, on March 5, 2014, we acquired our initial portfolio. On March 11, 2014, we completed our initial public offering and received $141.6 million of net proceeds in connection with the initial public offering and a concurrent private placement, net of the portion of the underwriting sales load and offering costs we paid. In 2015, we completed a follow-on public offering of our common stock raising $95.9 million after offering costs. In October 2017, we sold in a private placement transaction 1,594,007 shares of our common stock to certain investment funds managed by the Alternative Investments & Manager Selection Group of Goldman Sachs Asset Management, L.P. and 73,855 shares of our common stock to certain of our executive officers, for total gross proceeds of $22.6 million. In August 2018, we completed a public offering and a concurrent private placement offering of an aggregate 6,925,000 shares of our common stock, raising $94.6 million after offering costs. In January 2020, we completed follow-on public offering of an aggregate 5,750,000 shares of our common stock, raising $78.2 million after offering costs.
COVID-19 Developments
The COVID-19 pandemic, and the related effect on the U.S. and global economies, including the current economic downturn and the uncertainty associated with the timing and likelihood of economic recovery, has had adverse consequences for the business operations of some of our portfolio companies and has adversely affected, and threatens to continue to adversely affect, our operations and the operations of the Adviser.
While we have been monitoring, and continue to monitor, the COVID-19 pandemic and its impact on our and our portfolio companies’ business, we have continued to raise capital, maintain appropriate levels of available liquidity, support and monitor our existing portfolio companies, fund existing unfunded commitments, and selectively deploy capital in new investment opportunities in venture growth stage companies. As a result of our focus on maintaining adequate liquidity amid current market uncertainty, our interest expense has increased from comparable prior year periods due to maintaining a higher weighted average outstanding principal balance on borrowings and increased cash reserves. In addition, while we have not seen a material reduction in demand in the venture growth stage market, we do expect to see reduced originations during fiscal year 2020, as compared to fiscal year 2019 levels, as we and others, including potential venture growth stage portfolio companies, navigate the current challenging environment.
We have seen, and expect to continue to see, certain of our portfolio companies experience financial distress and, depending on the duration of the COVID-19 pandemic and the extent of its disruption to operations, expect that certain of our portfolio companies may default on their financial obligations to us and their other capital providers. The effects of the COVID-19 pandemic have also impeded, and may continue

43


to impede, the ability of certain of our portfolio companies to raise additional capital and/or pursue asset sales or otherwise execute strategic transactions, which could have a material adverse effect on the valuation of our investments in such companies. Portfolio companies operating in certain industries may be more susceptible to these risks than other portfolio companies in other industries in light of the effects of the COVID-19 pandemic. Some of our portfolio companies have already taken steps to significantly reduce, modify, or alter business strategies and operations, and we expect that additional portfolio companies may take similar steps if subjected to prolonged and severe financial distress, which may impair their business on a permanent basis. In addition, due to the completion of equity rounds by certain portfolio companies at lower valuations than rounds completed prior to the onset of the COVID-19 pandemic, we have experienced unrealized depreciation on certain of our warrant and equity investments despite the relevant companies’ ability to mitigate disruptions on their business strategies and operations. There can be no assurance that future equity rounds completed by our portfolio companies will be at levels greater than or equal to previous rounds, which may result in net unrealized depreciation on our warrant and equity portfolio in future periods.
In part due to these COVID-19-related developments, the fair value of certain of our portfolio investments as of June 30, 2020 and our expected recoveries for certain investments have decreased as compared to their fair value and expected recoveries as of December 31, 2019, and there may be further decreases in the fair values of our portfolio investments going forward. As of June 30, 2020, we had two portfolio companies in which our investments were on non‑accrual status (all of which were generally caused by events unrelated to the COVID-19 pandemic), with an aggregate cost and fair value of $31.8 million and $16.5 million, respectively. The various effects of the COVID-19 pandemic, including those discussed above, increase the risk that we will place additional investments on non-accrual status in the future.
As of June 30, 2020, we are permitted under the 1940 Act, as a BDC, to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowing. In addition, the indenture governing the 2022 Notes contains certain covenants, including covenants (i) requiring our compliance with the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a) of the 1940 Act (after giving effect to any exemptive relief granted to us by the SEC); and (ii) if our asset coverage has been below the 1940 Act minimum asset coverage requirements (after giving effect to any exemptive relief granted to us by the SEC) for more than six consecutive months, prohibiting the declaration of any cash dividend or distribution on our common stock (except to the extent necessary for us to maintain our treatment as a RIC under Subchapter M of the Code), or purchasing any of our common stock, unless, at the time of the declaration of the dividend or distribution or the purchase, and after deducting the amount of such dividend, distribution, or purchase, we are in compliance with the 1940 Act asset coverage requirements (after giving effect to any exemptive relief granted to us by the SEC). The Credit Facility also includes certain covenants, including without limitation, a covenant requiring 150% asset coverage in accordance with the 1940 Act, and the Note Purchase Agreement governing the 2025 Notes contains certain covenants, including without limitation, a minimum asset coverage ratio of 150%, a minimum interest coverage ratio of 125%, and a minimum stockholders’ equity threshold. Moreover, the fixed rate of the 2025 Notes is subject to a 1.00% increase in the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, which risk is increased as a result of the impact of the COVID-19 pandemic. See “Note 6. Borrowings” in the notes to consolidated financial statements for more information regarding the terms of the Credit Facility, the 2022 Notes, and the 2025 Notes.
As discussed below under “Results of Operations,” our net asset value per share as of June 30, 2020 decreased as compared to our net asset value per share as of December 31, 2019, in part due to the aggregate unrealized depreciation of our investment portfolio caused by the immediate adverse economic effects of the COVID-19 pandemic and uncertainty regarding the extent and duration of its impact. Any significant increase in aggregate unrealized depreciation of our investment portfolio or further significant reductions in our net asset value as a result of the effects of the COVID-19 pandemic or otherwise increases the risk of failing to meet the 1940 Act asset coverage requirements and breaching covenants under the Credit Facility, under the indenture governing the 2022 Notes, and under the Note Purchase Agreement governing the 2025 Notes, or otherwise triggering an event of default under the relevant borrowing arrangement. Any such breach of covenant or event of default, if we are not able to obtain a waiver from the required lenders or debt holders, would have a material adverse effect on our business, liquidity, financial condition, results of operations and ability to pay distributions to our stockholders. See “Risk Factors” in this Quarterly Report on Form 10-Q and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as well as “Risk Factors” in Part I of our Annual Report on Form 10‑K for the year ended December 31, 2019, for more information. As of June 30, 2020, we were in compliance with the asset coverage requirements under the 1940 Act, and we were not in breach of any covenants under the Credit Facility, under the indenture governing the 2022 Notes, or under the Note Purchase Agreement governing the 2025 Notes. We do not expect to breach any of these covenants in the near term assuming that conditions do not materially deteriorate further or for a prolonged period of time.
We will continue to monitor the rapidly evolving situation relating to the COVID-19 pandemic and related guidance from U.S. and international authorities, including federal, state and local public health authorities. Given the dynamic nature of this situation and the fact that there may be developments outside of our control that require us or our portfolio companies to adjust plans of operation, we cannot reasonably estimate the full impact of COVID-19 on our financial condition, results of operations or cash flows in the future. However, it could have a material adverse impact for a prolonged period of time on our future net investment income, particularly with respect to our interest income, the fair value of our portfolio investments, and the results of operations and financial condition of us and our portfolio companies. See “Risk Factors” in this Quarterly Report on Form 10-Q for more information.
Portfolio Composition, Investment Activity and Asset Quality
Portfolio Composition
We originate and invest primarily in venture growth stage companies. Companies at the venture growth stage have distinct characteristics differentiating them from venture capital-backed companies at other stages in their development lifecycle. We invest primarily in (i) growth capital loans that have a secured collateral position and that are generally used by venture growth stage companies to finance their continued expansion and growth, (ii) equipment financings, which may be structured as loans or leases, that have a secured collateral position on specified mission-

44


critical equipment, (iii) on a select basis, revolving loans that have a secured collateral position and that are typically used by venture growth stage companies to advance against inventory, components, accounts receivable, contractual or future billings, bookings, revenues, sales or cash payments and collections including proceeds from a sale, financing or the equivalent and (iv) direct equity investments in venture growth stage companies. In connection with our growth capital loans, equipment financings and revolving loans, we generally receive warrant investments that allow us to participate in any equity appreciation of our borrowers and enhance our overall investment returns.
As of June 30, 2020, we had 206 investments in 69 companies. Our investments included 114 debt investments, 69 warrant investments, and 23 direct equity and related investments. As of June 30, 2020, the aggregate cost and fair value of these investments were $708.5 million and $692.9 million, respectively. As of June 30, 2020, three of our portfolio companies were publicly traded. As of June 30, 2020, the 114 debt investments had an aggregate fair value of $652.5 million and a weighted average loan to enterprise value ratio at the time of underwriting of 9.3%. Enterprise value of a portfolio company is estimated based on information available, including any information regarding the most recent rounds of equity funding, at the time of origination.
As of December 31, 2019, we had 187 investments in 68 companies. Our investments included 102 debt investments, 64 warrant investments, and 21 direct equity and related investments. As of December 31, 2019, the aggregate cost and fair value of these investments were $660.7 million and $653.1 million, respectively. As of December 31, 2019, two of our portfolio companies were publicly traded. As of December 31, 2019, the 102 debt investments had an aggregate fair value of $604.5 million and a weighted average loan to enterprise value ratio at the time of underwriting of 9.3%. Enterprise value of a portfolio company is estimated based on information available, including any information regarding the most recent rounds of equity funding, at the time of origination.
The following tables show information on the cost and fair value of our investments in companies along with the number of companies in our portfolio as of June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
Investments by Type
(dollars in thousands)
 
Cost
 
Fair Value
 
Net Unrealized Gains (losses)
 
Number of
Investments
 
Number of
Companies
 
Debt investments
 
$
676,950

 
$
652,533

 
$
(24,417
)
 
114

 
37

 
Warrant investments
 
18,993

 
20,996

 
$
2,003

 
69

 
61

 
Equity investments
 
12,597

 
19,324

 
$
6,727

 
23

 
21

 
Total Investments in Portfolio Companies
 
$
708,540

 
$
692,853

 
$
(15,687
)
 
206

 
69

(1) 
_______________
(1)Represents non-duplicative number of companies.
 
 
December 31, 2019
 
Investments by Type
(dollars in thousands)
 
Cost
 
Fair Value
 
Net Unrealized Gains (losses)
 
Number of
Investments
 
Number of
Companies
 
Debt investments
 
$
630,724

 
$
604,518

 
$
(26,206
)
 
102

 
38

 
Warrant investments
 
18,150

 
22,090

 
$
3,940

 
64

 
58

 
Equity investments
 
11,801

 
26,521

 
$
14,720

 
21

 
20

 
Total Investments in Portfolio Companies
 
$
660,675

 
$
653,129

 
$
(7,546
)
 
187

 
68

(1) 
_______________
(1)Represents non-duplicative number of companies.

45


The following tables show the fair value of the portfolio of investments, by industry and the percentage of the total investment portfolio, as of June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
Investments in Portfolio Companies by Industry
(dollars in thousands)‍
 
At Fair Value
 
Percentage of Total Investments
Business Applications Software
 
$
89,870

 
13.0
%
Financial Institution and Services
 
50,046

 
7.2

E-Commerce - Clothing and Accessories
 
41,491

 
6.0

Network Systems Management Software
 
40,820

 
5.9

Security Services
 
35,853

 
5.2

Consumer Products and Services
 
35,828

 
5.2

E-Commerce - Personal Goods
 
32,786

 
4.7

Entertainment
 
30,328

 
4.4

Household & Office Goods
 
30,228

 
4.4

Social/Platform Software
 
30,069

 
4.3

Real Estate Services
 
30,024

 
4.3

Travel & Leisure
 
29,853

 
4.3

Business to Business Marketplace
 
29,548

 
4.3

Buildings and Property
 
29,530

 
4.3

Shopping Facilitators
 
25,743

 
3.7

Healthcare Technology Systems
 
22,077

 
3.2

Other Financial Services
 
19,832

 
2.9

Food & Drug
 
16,138

 
2.3

Database Software
 
14,764

 
2.1

Consumer Retail
 
11,401

 
1.6

Consumer Non-Durables
 
10,652

 
1.5

Commercial Services
 
10,086

 
1.5

Human Resources/Recruitment
 
9,944

 
1.4

Multimedia and Design Software
 
9,812

 
1.4

Communications Software
 
2,000

 
0.3

Restaurant / Food Service
 
1,500

 
0.2

General Media and Content
 
1,160

 
0.2

Building Materials/Construction Machinery
 
591

 
0.1

Educational/Training Software
 
441

 
0.1

Transportation
 
221

 
*

Conferencing Equipment / Services
 
205

 
*

Advertising / Marketing
 
12

 
*

Medical Software and Information Services
 

 
%
Total portfolio company investments
 
$
692,853

 
100.0
%
_______________
*
Amount represents less than 0.05% of the total portfolio investments.


46


 
 
December 31, 2019
Investments in Portfolio Companies by Industry
(dollars in thousands)‍
 
At Fair Value
 
Percentage of Total Investments
Business Applications Software
 
$
74,937

 
11.5
%
Consumer Products and Services
 
50,664

 
7.8

Financial Institution and Services
 
47,042

 
7.2

Security Services
 
45,252

 
6.9

E-Commerce - Clothing and Accessories
 
42,539

 
6.5

Business to Business Marketplace
 
38,504

 
5.9

Entertainment
 
34,346

 
5.3

Network Systems Management Software
 
34,188

 
5.2

Household & Office Goods
 
32,298

 
4.9

Buildings and Property
 
30,459

 
4.7

Social / Platform Software
 
30,248

 
4.6

Real Estate Services
 
23,076

 
3.5

Healthcare Technology Systems
 
21,410

 
3.3

Other Financial Services
 
20,344

 
3.1

Travel & Leisure
 
20,311

 
3.1

Shopping Facilitators
 
15,745

 
2.4

E-Commerce - Personal Goods
 
15,300

 
2.3

Database Software
 
14,891

 
2.3

Food & Drug
 
12,687

 
1.9

Consumer Non-Durables
 
10,626

 
1.6

Consumer Retail
 
10,158

 
1.6

Commercial Services
 
9,998

 
1.5

Human Resources/Recruitment
 
9,975

 
1.5

Communications Software
 
2,000

 
0.3

Biofuels / Biomass
 
1,797

 
0.3

Restaurant / Food Service
 
1,593

 
0.2

General Media and Content
 
1,073

 
0.2

Building Materials / Construction Machinery
 
500

 
0.1

Educational / Training Software
 
434

 
0.1

Conferencing Equipment / Services
 
205

 
*

Transportation
 
193

 
*

Wireless Communications Equipment
 
188

 
*

Advertising / Marketing
 
148

 
*

Medical Software and Information Services
 

 

Total portfolio company investments
 
$
653,129

 
100.0
%
_______________
*
Amount represents less than 0.05% of the total portfolio investments.
The following table shows the financing product type of our debt investments as of June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
December 31, 2019
Debt Investments By Financing Product
(dollars in thousands)
 
Fair Value
 
Percentage of Total Debt Investments
 
Fair Value
 
Percentage of Total Debt Investments
Growth capital loans
 
$
645,955

 
99.0
%
 
$
599,030

 
99.1
%
Revolver loans
 
6,578

 
1.0

 
5,488

 
0.9

Total debt investments
 
$
652,533

 
100.0
%
 
$
604,518

 
100.0
%
Investment Activity
During the three months ended June 30, 2020, we entered into debt commitments with two new portfolio companies and two existing portfolio companies totaling $13.9 million, funded 10 debt investments for $20.5 million in principal value, acquired warrant investments representing $0.2 million of value and made equity investments of $0.1 million. During the three months ended June 30, 2019, we entered into

47


debt commitments with five new portfolio companies and four existing portfolio companies totaling $98.4 million, funded 17 debt investments for $72.5 million in principal value, acquired warrant investments representing $0.7 million of value and made equity investments of $1.7 million.
During the six months ended June 30, 2020, we entered into debt commitments with four new portfolio companies and six existing portfolio companies totaling $116.5 million, funded 27 debt investments for $99.3 million in principal value, acquired warrant investments representing $1.2 million of value and made equity investments of $1.5 million. During the six months ended June 30, 2019, we entered into debt commitments with 10 new portfolio companies and eight existing portfolio companies totaling $289.3 million, funded 30 debt investments for $162.1 million in principal value, acquired warrant investments representing $2.5 million of value and made equity investments of $2.2 million.
The following table shows the total portfolio investment activity for the three and six months ended June 30, 2020 and 2019:
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
(in thousands)
 
2020
 
2019
 
2020
 
2019
Beginning portfolio at fair value
 
$
713,155

 
$
457,695

 
$
653,129

 
$
433,417

New debt investments, net(1)
 
20,126

 
71,082

 
97,151

 
158,721

Scheduled principal amortization
 
(12,134
)
 
(8,367
)
 
(17,947
)
 
(21,327
)
Principal prepayments and early repayments
 
(25,105
)
 
(42,551
)
 
(26,105
)
 
(100,104
)
Accretion of debt investment fees
 
4,266

 
1,741

 
8,048

 
4,976

Payment-in-kind coupon
 
2,764

 
291

 
3,616

 
1,062

New warrant investments
 
153

 
710

 
1,227

 
2,524

New equity investments
 
125

 
1,662

 
1,545

 
2,162

Proceeds and dispositions of investments
 
(20,658
)
 
20

 
(20,658
)
 
(302
)
Net realized gains (losses)
 
1,277

 
(17
)
 
988

 
(46
)
Net unrealized gains (losses) on investments
 
8,884

 
13,755

 
(8,141
)
 
14,938

Ending portfolio at fair value
 
$
692,853

 
$
496,021

 
$
692,853

 
$
496,021

_______________
(1)Debt balance is net of fees and discounts applied to the loan at origination.
As of June 30, 2020, our unfunded commitments to 14 companies totaled $180.4 million. During the three and six months ended June 30, 2020, $14.0 million and $69.3 million, respectively, in unfunded commitments expired or were terminated.
As of December 31, 2019, our unfunded commitments to 16 companies totaled $226.1 million. During the year ended December 31, 2019, $167.1 million in unfunded commitments expired or were terminated.
The following table shows additional information on our unfunded commitments regarding milestones, expirations, and types of loans as of June 30, 2020 and December 31, 2019:
Unfunded Commitments(1)
(in thousands)
 
June 30, 2020
 
December 31, 2019
Dependent on milestones
 
$
33,333

 
$
59,333

Expiring during:
 
 
 
 
2020
 
151,333

 
188,083

2021
 
29,034

 
38,000

Total
 
$
180,367

 
$
226,083

_______________
(1)Does not include backlog of potential future commitments.
Our credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments in instances where the underlying company experiences material adverse events that affect the financial condition or business outlook for the company. Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for us. We generally expect 50% - 75% of our gross unfunded commitments to eventually be drawn before the expiration of their corresponding availability periods.
The fair value at the inception of the delay draw credit agreements with our portfolio companies is equal to the fees and/or warrants received to enter into these agreements, taking into account the remaining terms of the agreements and the counterparties’ credit profile. The unfunded commitment liability reflects the fair value of these future funding commitments. As of June 30, 2020 and December 31, 2019, the fair value for these unfunded commitments totaled $1.6 million and $2.2 million, respectively, and was included in “other accrued expenses and liabilities” in our consolidated statements of assets and liabilities.
Our level of investment activity can vary substantially from period to period as our Adviser chooses to slow or accelerate new business originations depending on market conditions, rate of investment of TPC’s select group of leading venture capital investors, our Adviser’s knowledge, expertise and experience, our funding capacity (including availability under the Credit Facility and our ability or inability to raise equity or debt capital), and other market dynamics.

48


The following table shows the debt commitments, fundings of debt investments (principal balance) and equity investments and non-binding term sheet activity for the three and six months ended June 30, 2020 and 2019:
Commitments and Fundings
(in thousands)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Debt Commitments
 
 
 
 
 
 
 
 
New portfolio companies
 
$
10,000

 
$
62,000

 
$
75,000

 
$
192,000

Existing portfolio companies
 
3,915

 
36,363

 
41,488

 
97,323

Total(1)
 
$
13,915

 
$
98,363

 
$
116,488

 
$
289,323

 
 
 
 
 
 
 
 
 
Funded Debt Investments
 
$
20,507

 
$
72,538

 
$
99,267

 
$
162,055

 
 
 
 
 
 
 
 
 
Equity Investments
 
$
125

 
$
1,662

 
$
1,545

 
$
2,162

 
 
 
 
 
 
 
 
 
Non-Binding Term Sheets
 
$
92,890

 
$
203,638

 
$
172,421

 
$
453,661

_______________
(1)Includes backlog of potential future commitments.
We may enter into commitments with certain portfolio companies that permit an increase in the commitment amount in the future in the event that conditions to such increases are met (“backlog of potential future commitments”). If such conditions to increase are met, these amounts may become unfunded commitments if not drawn prior to expiration. As of June 30, 2020 and December 31, 2019, this backlog of potential future commitments totaled $9.1 million and $15.5 million, respectively.
Asset Quality
Consistent with TPC’s existing policies, our Adviser maintains a credit watch list which places borrowers into five risk categories based on our Adviser’s senior investment team’s judgment, where 1 is the highest rating and all new loans are generally assigned a rating of 2.
Category
 
Category Definition
 
Action Item
 
 
 
 
 
Clear (1)
 
Performing above expectations and/or strong financial or enterprise profile, value or coverage.
 
Review quarterly.
White (2)
 
Performing at expectations and/or reasonably close to it. Reasonable financial or enterprise profile, value or coverage. Generally, all new loans are initially graded White.
 
Contact portfolio company periodically in no event less than quarterly.
Yellow (3)
 
Performing generally below expectations and/or some proactive concern. Adequate financial or enterprise profile, value or coverage.
 
Contact portfolio company monthly or more frequently as determined by our Adviser’s Investment Committee; contact venture capital investors.
Orange (4)
 
Needs close attention due to performance materially below expectations, weak financial and/or enterprise profile, concern regarding additional capital or exit equivalent.
 
Contact portfolio company weekly or more frequently as determined by our Adviser’s Investment Committee; contact venture capital investors regularly; our Adviser forms a workout group to minimize risk of loss.
Red (5)
 
Serious concern/trouble due to pending or actual default or equivalent. May experience partial and/or full loss.
 
Maximize value from assets.
The following table shows the credit rankings for the portfolio companies that had outstanding debt obligations to us as of June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
December 31, 2019
Credit Category
(dollars in thousands)
 
Fair Value
 
Percentage of Total Debt Investments
 
Number of Portfolio Companies
 
Fair Value
 
Percentage of Total Debt Investments
 
Number of Portfolio Companies
Clear (1)
 
$
116,596

 
17.9
%
 
7
 
$
121,866

 
20.2
%
 
8
White (2)
 
415,232

 
63.6

 
24
 
425,016

 
70.3

 
23
Yellow (3)
 
104,205

 
16.0

 
4
 
31,103

 
5.1

 
3
Orange (4)
 
15,000

 
2.3

 
1
 
22,956

 
3.8

 
1
Red (5)
 
1,500

 
0.2

 
1
 
3,577

 
0.6

 
3
 
 
$
652,533

 
100.0
%
 
37
 
$
604,518

 
100.0
%
 
38
As of June 30, 2020 and December 31, 2019, the weighted average investment ranking of our debt investment portfolio was 2.03 and 1.94, respectively. During the three months ended June 30, 2020, portfolio company credit category changes, excluding fundings and repayments, consisted of the following: one portfolio company with an aggregate principal balance of $15.0 million was upgraded from White (2) to Clear (1); one portfolio company with an aggregate principal balance of $10.0 million was upgraded from Yellow (3) to White (2); one portfolio company with an aggregate principal balance of $21.6 million was downgraded from White (2) to Yellow (3); and two portfolio companies with an aggregate principal balance of $17.0 million were removed from Red (5) as a result of the finalization of asset sales.

49


Results of Operations
Comparison of operating results for the three and six months ended June 30, 2020 and 2019
An important measure of our financial performance is net increase (decrease) in net assets resulting from operations, which includes net investment income (loss), net realized gains (losses) and net unrealized gains (losses). Net investment income (loss) is the difference between our income from interest, dividends, fees and other investment income and our operating expenses including interest on borrowed funds. Net realized gains (losses) on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost. Net unrealized gains (losses) on investments is the net change in the fair value of our investment portfolio.
For the three months ended June 30, 2020, our net increase in net assets resulting from operations was $21.2 million, which was comprised of $11.5 million of net investment income and $9.7 million of net realized and unrealized gains. For the three months ended June 30, 2019, our net increase in net assets resulting from operations was $23.9 million, which was comprised of $10.1 million of net investment income and $13.7 million of net realized and unrealized gains. On a per share basis for the three months ended June 30, 2020, net investment income was $0.38 per share and the net increase in net assets from operations was $0.69 per share, as compared to net investment income of $0.41 per share and a net increase in net assets from operations of $0.96 per share for the three months ended June 30, 2019.
For the six months ended June 30, 2020, our net increase in net assets resulting from operations was $16.1 million, which was comprised of $23.8 million of net investment income and $7.7 million of net realized and unrealized losses. For the six months ended June 30, 2019, our net increase in net assets resulting from operations was $34.9 million, which was comprised of $20.0 million of net investment income and $14.9 million of net realized and unrealized gains. On a per share basis for the six months ended June 30, 2020, net investment income was $0.78 per share and the net increase in net assets from operations was $0.53 per share, as compared to net investment income of $0.81 per share and a net increase in net assets from operations of $1.41 per share for the six months ended June 30, 2019.
Investment Income
Total investment and other income for the three months ended June 30, 2020 was $23.8 million as compared to $18.9 million for the three months ended June 30, 2019. The increase in total investment and other income for the three months ended June 30, 2020, compared to the comparable period of 2019, is primarily due to higher weighted average principal outstanding on our income-bearing debt investment portfolio, partially offset by a lower effective yield due to lower prepayment activity and a decrease in the Prime Rate.
Total investment income for the six months ended June 30, 2020 was $44.6 million as compared to $36.4 million for the six months ended June 30, 2019. The increase in total investment income for the six months ended June 30, 2020, compared to the comparable period of 2019, is primarily due to higher weighted average principal outstanding on our income-bearing debt investment portfolio, partially offset by a lower effective yield due to lower prepayment activity and a decrease in the Prime Rate.
For the three months ended June 30, 2020, we recognized $0.5 million in other income, consisting of $0.1 million due to the termination or expiration of unfunded commitments and $0.4 million from the realization of certain fees paid by portfolio companies and other income related to prepayment activity. For the three months ended June 30, 2019, we recognized $1.0 million in other income, primarily consisting of $0.9 million from amortization of certain fees paid by portfolio companies and other income.
For the six months ended June 30, 2020, we recognized $1.1 million in other income, consisting of $0.7 million due to the termination or expiration of unfunded commitments and $0.4 million from the realization of certain fees paid by portfolio companies and other income related to prepayment activity. For the six months ended June 30, 2019, we recognized $1.4 million in other income, consisting of $0.3 million from the termination or expiration of unfunded commitments and $1.1 million from amortization of certain fees paid by portfolio companies and other income.
Operating Expenses
Total operating expenses consist of base management fee, income incentive fee, capital gains incentive fee, interest expense and amortization of fees, administration agreement expenses, and general and administrative expenses. In determining the base management fee, our Adviser has agreed to exclude U.S. Treasury bill assets acquired at the end of each applicable quarter from the calculation of the gross assets. We anticipate operating expenses will increase over time as our portfolio continues to grow. However, we anticipate operating expenses, as a percentage of totals assets and net assets, will generally decrease over time as our portfolio and capital base expand. We expect base management and income incentive fees will increase as we grow our asset base and our earnings. The capital gains incentive fee will depend on realized and unrealized gains and losses. Interest expenses will generally increase as we utilize more of the Credit Facility and issue additional debt securities, and we generally expect expenses under the administration agreement and general and administrative expenses to increase over time to meet the additional requirements associated with servicing a larger portfolio.
Total operating expenses for the three months ended June 30, 2020 were $12.3 million as compared to $8.8 million for the three months ended June 30, 2019. Total operating expenses for the six months ended June 30, 2020 were $20.9 million as compared to $16.4 million for the six months ended June 30, 2019.
Base management fees totaled $3.2 million and $2.1 million for the three months ended June 30, 2020 and 2019, respectively, and $6.0 million and $3.8 million for the six months ended June 30, 2020 and 2019, respectively. Base management fees for the three and six months ended June 30, 2020, as compared to the three and six months ended June 30, 2019, increased primarily due to an increase in the average size of our portfolio between periods.

50


Income incentive fees totaled $2.9 million and $2.5 million for the three months ended June 30, 2020 and 2019, respectively, and $2.9 million and $5.0 million for the six months ended June 30, 2020 and 2019, respectively. For the six months ended June 30, 2020, our income incentive fee was reduced by $2.4 million due to the total return requirement under the income component of our incentive fee structure, which resulted in a corresponding increase of $2.4 million in net investment income.
There was no capital gains incentive fee expense calculated for the three and six months ended June 30, 2020 and 2019.
Interest expense and fees on our borrowings for the three months ended June 30, 2020 and 2019 totaled $4.3 million and $3.0 million, respectively, and $8.5 million and $5.2 million for the six months ended June 30, 2020 and 2019, respectively. Interest expense and fees for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019 increased due to a higher weighted average outstanding principal balance on borrowings, as well as the issuance of the 2025 Notes, offset by a decrease in interest rates. Interest expense and fees for the six months ended June 30, 2020, as compared to the six months ended June 30, 2019 increased due to a higher weighted average outstanding principal balance on borrowings, as well as the issuance of the 2025 Notes, offset by a decrease in interest rates.
Administration agreement and general and administrative expenses totaled $1.8 million and $1.2 million for the three months ended June 30, 2020 and 2019, respectively, and $3.5 million and $2.3 million for the six months ended June 30, 2020 and 2019, respectively. The increase for the three and six months ended June 30, 2020, as compared to the three and six months ended June 30, 2019, was primarily due to higher overhead allocation between periods and increased use of professional services.
Net Realized Gains and Losses and Net Unrealized Gains and Losses
Realized gains and losses are included in net realized gains (losses) on investments in the consolidated statements of operations.
During the three months ended June 30, 2020, we recognized net realized gains on investments of $0.8 million, consisting of $19.4 million of realized gains from the sale of publicly traded shares held in CrowdStrike, Inc. offset by $18.0 of realized losses from the finalization of asset sales and removal of two obligors, Cambridge Broadband Network Limited and Harvest Power, Inc., rated Red (5) on our credit watch list, and $0.6 million of other net realized losses. During the three months ended June 30, 2019, we recognized net realized losses on investments of approximately $17,000, as a result of changes in foreign currency between the time of investment and liquidation.
During the six months ended June 30, 2020, we recognized net realized gains on investments of $0.5 million, consisting of $19.4 million of realized gains from the sale of publicly traded shares held in CrowdStrike, Inc. offset by $18.0 of realized losses from the finalization of asset sales and removal of two obligors, Cambridge Broadband Network Limited and Harvest Power, Inc., rated Red (5) on our credit watch list, and $0.9 million of other net realized losses. During the six months ended June 30, 2019, we recognized net realized losses on investments of approximately $46,000, as a result of changes in foreign currency between the time of investment and liquidation.
Unrealized gains and losses are included in net change in unrealized gains (losses) on investments in the consolidated statements of operations.
Net change in unrealized gains during the three months ended June 30, 2020 was $8.9 million, resulting from the reversal of $18.0 million of previously recorded unrealized losses from the finalization of asset sales and removal of two obligors rated Red (5) on our credit watch list and by $2.5 million of net unrealized gains from mark-to-market related changes and credit-related adjustments, partially offset by the reversal of $11.6 million of previously recorded unrealized gains associated with the shares of CrowdStrike, Inc. sold during the quarter. Net change in unrealized gains during the three months ended June 30, 2019 was $13.8 million, which primarily consisted of net unrealized gains of $14.0 million on the investment portfolio related to mark to market activity attributed to one portfolio company, following its initial public offering, offset by net unrealized losses of $0.3 million as a result of changes in funds held in foreign currency for investment and a decline in the price of our equity in one portfolio company.
Net change in unrealized losses during the six months ended June 30, 2020 was $8.1 million, resulting primarily from valuation adjustments related to market yields and credit-related adjustments, the reversal of $11.6 million of previously recorded unrealized gains associated with the shares of CrowdStrike, Inc. sold during the quarter, partially offset by the reversal of $18.0 million of previously recorded unrealized losses from the finalization of asset sales and removal of two obligors rated Red (5) on our credit watch list. Net change in unrealized gains during the six months ended June 30, 2019 was $14.9 million, which consisted of $17.1 million of net unrealized gains on the investment portfolio related to valuation adjustments primarily from our investment in one portfolio company following its initial public offering, as well as appreciation in our investment in another publicly traded portfolio company, offset by the reversal and recognition of previously recorded net unrealized gains of $1.9 million into income or realized gains due to the disposition of five portfolio companies and net unrealized losses of $0.3 million as a result of changes in funds held in foreign currency for investment.
Net change in realized and unrealized gains or losses in subsequent periods may be volatile as it depends on changes in the market, changes in the underlying performance of our portfolio companies and their respective industries, and other market factors.
Portfolio Yield and Total Return
Investment income includes interest income on our debt investments utilizing the effective yield method including cash interest income as well as the amortization of any purchase premium, accretion of purchase discount, original issue discount, facilities fees, and the amortization and payment of the end-of-term (“EOT”) payments. For the three and six months ended June 30, 2020, interest income totaled $23.3 million and $43.5 million, respectively, representing a weighted average annualized portfolio yield on total debt investments for the period held of 13.7% and 13.2%, respectively. For the three and six months ended June 30, 2019, interest income totaled $17.9 million, and $35.0 million, respectively, representing a weighted average annualized portfolio yield on total debt investments for the period held of 16.5% and 16.4%, respectively.

51


We calculate weighted average annualized portfolio yields for periods shown as the annualized rates of the interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The weighted average yields reported for these periods are annualized and reflect the weighted average yields to maturities. Should the portfolio companies choose to repay their loans earlier, our weighted average yields will increase for those debt investments affected but may reduce our weighted average yields on the remaining portfolio in future quarters.
The yield on our total debt portfolio, excluding the impact of prepayments, was 12.7% and 12.7%, respectively, for the three and six months ended June 30, 2020. The yield on our total debt portfolio, excluding the impact of prepayments, was 13.7% and 13.7%, respectively, for the three and six months ended June 30, 2019.
The following table shows the weighted average annualized portfolio yield on our total debt portfolio comprising of cash interest income, accretion of the net purchase discount, facilities fees and the value of warrant investments received, accretion of EOT payments and the accelerated receipt of EOT payments on prepayments:
Returns on Net Asset Value and Total Assets
Portfolio Yield(1)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Weighted average annualized portfolio yield on total debt investments(2)
 
13.7
%
 
16.5
%
 
13.2
%
 
16.4
%
Coupon income
 
10.1
%
 
10.6
%
 
10.0
%
 
10.6
%
Accretion of discount
 
0.9
%
 
0.8
%
 
1.0
%
 
0.9
%
Accretion of end-of-term payments
 
1.7
%
 
2.3
%
 
1.7
%
 
2.2
%
Impact of prepayments during the period
 
1.0
%
 
2.8
%
 
0.5
%
 
2.7
%
 
 
 
 
 
 
 
 
 
Prime Rate at end of period(3)
 
3.25
%
 
5.50
%
 
3.25
%
 
5.50
%
_______________
(1)
The yields for periods shown are the annualized rates of interest income or the components of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period.
(2)
The weighted average portfolio yields on total debt investments reflected above do not represent actual investment returns to our stockholders.
(3)
Included as a reference point for coupon income and weighted average portfolio yield.
Our weighted average annualized portfolio yield on debt investments may be higher than an investor’s yield on an investment in shares of our common stock. Our weighted average annualized portfolio yield on debt investments does not reflect operating expenses that may be incurred by us. In addition, our weighted average annualized portfolio yield on debt investments and total return figures disclosed in this Quarterly Report on Form 10-Q do not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of shares of our common stock. Our weighted average annualized portfolio yield on debt investments and total return based on NAV do not represent actual investment returns to stockholders. Our weighted average annualized portfolio yield on debt investments and total return figures are subject to change and, in the future, may be greater or less than the rates in this Quarterly Report on Form 10-Q. Total return based on NAV is the change in ending NAV per share plus distributions per share paid during the period assuming participation in our dividend reinvestment plan divided by the beginning NAV per share for such period. Total return based on stock price is the change in the ending stock price of our common stock plus distributions paid during the period assuming participation in our dividend reinvestment plan divided by the beginning stock price of our common stock for such period. The total return is for the period shown and is not annualized.
For the three and six months ended June 30, 2020, our total return per period based on the change in NAV plus distributions reinvested as of the distribution date per share was 6.3% and 8.9%, respectively, and our total return per period based on the change in stock price plus distributions reinvested as of the distribution date was 85.7% and (20.3)%, respectively.
For the three and six months ended June 30, 2019, our total return per period based on the change in NAV plus distributions reinvested as of the distribution date per share was 10.2% and 10.9%, respectively, and our total return per period based on the change in stock price plus distributions reinvested as of the distribution date was 9.1% and 37.9%, respectively.

52


The table below shows our return on average total assets and return on average NAV for the three and six months ended June 30, 2020 and 2019:
Returns on Net Asset Value and Total Assets
(dollars in thousands)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Net investment income
 
$
11,536

 
$
10,123

 
$
23,773

 
$
20,038

Net increase (decrease) in net assets
 
$
21,222

 
$
23,861

 
$
16,104

 
$
34,930

 
 
 
 
 
 
 
 
 
Average net asset value(1)
 
$
402,488

 
$
337,318

 
$
403,421

 
$
337,366

Average total assets(1)
 
$
766,742

 
$
525,645

 
$
745,565

 
$
497,375

 
 
 
 
 
 
 
 
 
Net investment income to average net asset value(2)
 
11.5
%
 
12.0
%
 
11.9
%
 
12.0
%
Net increase (decrease) in net assets to average net asset value(2)
 
21.2
%
 
28.4
%
 
8.0
%
 
20.9
%
 
 
 
 
 
 
 
 
 
Net investment income to average total assets(2)
 
6.1
%
 
7.7
%
 
6.4
%
 
8.1
%
Net increase (decrease) in net assets to average total assets(2)
 
11.1
%
 
18.2
%
 
4.3
%
 
14.2
%
_______________
(1)
The average net asset values and the average total assets are computed based on daily balances.
(2)
Percentage is presented on an annualized basis.
Critical Accounting Policies
The preparation of our financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. We consider valuation of investments, income recognition, realized / unrealized gains or losses and U.S. federal income taxes to be our critical accounting policies and estimates. These critical accounting policies and estimates, and any changes thereto, are discussed under “Note 2. Significant Accounting Policies” and “Note 4. Investments” in the notes to consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 4, 2020 and under “Note 4. Investments” in the notes to consolidated financial statements included in this Quarterly Report on Form 10-Q. Any changes to the policies are disclosed in the notes to the consolidated financial statements in this Quarterly Report on Form 10-Q.
Liquidity and Capital Resources
We believe that our current cash and cash equivalents on hand, our available borrowing capacity under the Credit Facility and our anticipated cash flows from operations, including from contractual monthly portfolio company payments and cash flows, prepayments, and the ability to liquidate publicly traded investments, will be adequate to meet our cash needs for our daily operations. In addition, we also currently have available up to $25.0 million in commitments from the Adviser under an unsecured revolving loan agreement (the “Adviser Revolver”), any advance under which must be approved by the Adviser in advance in its sole discretion. This “Liquidity and Capital Resources” section should be read in conjunction with “COVID-19 Developments” above and the disclosure referenced in “Risk Factors” below in this Quarterly Report on Form 10-Q.
Cash Flows
During the six months ended June 30, 2020, net cash used by operating activities, consisting primarily of purchases, sales and repayments of investments and the items described in “Results of Operations,” was $25.1 million, and net cash provided by financing activities was $21.6 million due to net proceeds received from our January 2020 public follow-on offering of common stock and the issuance of the 2025 Notes in March 2020, partially offset by net repayments under the Credit Facility of $104.3 million and $21.3 million in distributions paid. As of June 30, 2020, cash, including restricted cash, was $23.0 million.
During the six months ended June 30, 2019, net cash used in operating activities, consisting primarily of purchases, sales and repayments of investments and the items described in “Results of Operations,” was $30.4 million, and net cash provided by financing activities was $44.8 million due to borrowings under the Credit Facility of $62.8 million, offset by $16.8 million in distributions paid and costs incurred in connection with the amendment and renewal of the Credit Facility in May 2019, which are deferred and expensed over the term of the Credit Facility. As of June 30, 2019, cash, including restricted cash, was $24.4 million.
Capital Resources and Borrowings
As a BDC, we generally have an ongoing need to raise additional capital for investment purposes. As a result, we expect, from time to time, to access the debt and equity markets when we believe it is necessary and appropriate to do so. In this regard, we continue to explore various options for obtaining additional debt or equity capital for investments. This may include expanding or extending the Credit Facility or the issuance of additional shares of our common stock or debt securities. If we are unable to obtain leverage or raise equity capital on terms that are acceptable to us, our ability to grow our portfolio could be substantially impacted.

53


Credit Facility
We have $300 million in total commitments available under the Credit Facility, subject to various covenants and borrowing base requirements. The Credit Facility also includes an accordion feature, which allows us to increase the size of the Credit Facility to up to $400 million. The revolving period under the Credit Facility expires on May 31, 2021 and the maturity date of the Credit Facility is November 30, 2022. Borrowings under the Credit Facility bear interest at the sum of (i) a floating rate based on certain indices, including LIBOR and commercial paper rates, plus (ii) a margin of 2.80% if facility utilization is greater than or equal to 75%, 2.90% if utilization is greater than or equal to 50%, 3.00% if utilization is less than 50% and 4.5% during the amortization period. See “Note 6. Borrowings” in the notes to consolidated financial statements for more information regarding the terms of the Credit Facility.
As of June 30, 2020 and December 31, 2019, we had outstanding borrowings of $158.0 million and $262.3 million, respectively, under the Credit Facility, excluding deferred credit facility costs of $1.0 million and $1.6 million, respectively, which is included in the consolidated statements of assets and liabilities. We had $142.0 million and $37.7 million of remaining capacity on our Credit Facility as of June 30, 2020 and December 31, 2019, respectively.
2022 Notes
On July 14, 2017, we completed a public offering of $65.0 million in aggregate principal amount of the 2022 Notes and received net proceeds of $62.8 million, after the payment of fees and offering costs. On July 24, 2017, as a result of the underwriters’ full exercise of their option to purchase additional 2022 Notes, we issued an additional $9.75 million in aggregate principal amount of the 2022 Notes and received net proceeds of $9.5 million, after the payment of fees and offering costs. The interest on the 2022 Notes, which accrues at an annual rate of 5.75%, is payable quarterly on January 15, April 15, July 15 and October 15. The maturity date of the 2022 Notes is July 15, 2022.
As of June 30, 2020 and December 31, 2019, we have recorded in the consolidated statements of assets and liabilities our liability for the 2022 Notes, net of deferred issuance costs, of $73.7 million and $73.5 million, respectively. See “Note 6. Borrowings” in the notes to consolidated financial statements for more information regarding the 2022 Notes.
2025 Notes
On March 19, 2020, we completed a private offering of $70.0 million in aggregate principal amount of the 2025 Notes and received net proceeds of $69.1 million, after the payment of fees and offering costs. The interest on the 2025 Notes, which accrues at an annual rate of 4.50%, is payable semiannually on March 19 and September 19 each year, beginning on September 19, 2020. The maturity date of the 2025 Notes is March 19, 2025.
As of June 30, 2020, we have recorded in the consolidated statements of assets and liabilities our liability for the 2025 Notes, net of deferred issuance costs, of $69.0 million. See “Note 6. Borrowings” in the notes to consolidated financial statements for more information regarding the 2025 Notes.
Adviser Revolver
On May 6, 2020, we entered into the Adviser Revolver with the Adviser, which has a maximum credit limit of $50.0 million, with $25.0 million currently available and an accordion feature for an additional $25.0 million in commitments from the Adviser. Any advance of funds under the Adviser Revolver, and any exercise of the accordion feature, must be approved by the Adviser in advance in its sole discretion. The Adviser Revolver expires on December 31, 2020, and borrowings thereunder bear an annual interest rate of 6.0%, payable quarterly. Any of our obligations under the Adviser Revolver are unsecured and are expressly subordinated and junior in right of payment to all of our other indebtedness for borrowed funds. As of June 30, 2020, we had no outstanding borrowings under the Adviser Revolver.
Asset Coverage Requirements
On June 21, 2018, our stockholders voted at a special meeting of stockholders to approve a proposal to authorize us to be subject to a reduced asset coverage ratio of at least 150% under the 1940 Act. As a result of the stockholder approval at the special meeting, effective June 22, 2018, our applicable minimum asset coverage ratio under the 1940 Act has been decreased to 150% from 200%. Thus, we are permitted under the 1940 Act, under specified conditions, to issue multiple classes of debt and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance. As of June 30, 2020, our asset coverage for borrowed amounts was 234%.
Contractual Obligations
The following table shows a summary of our payment obligations for repayment of debt as of June 30, 2020:
Payments Due By Period
(in thousands)
 
June 30, 2020
 
Total
 
Less than 1 year
 
1-3 years
 
3-5 years
 
More than 5 years
Credit Facility
 
$
158,000

 
$

 
$
158,000

 
$

 
$

2022 Notes
 
74,750

 

 
74,750

 

 

2025 Notes
 
70,000

 

 

 
70,000

 

Total
 
$
302,750

 
$

 
$
232,750

 
$
70,000

 
$


54


Off-Balance Sheet Arrangements
Commitments
We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of June 30, 2020 and December 31, 2019, our unfunded commitments totaled $180.4 million to 14 portfolio companies and $226.1 million to 16 portfolio companies, respectively, of which $33.3 million and $59.3 million, respectively, was dependent upon the portfolio companies reaching certain milestones before the debt commitment becomes available to them. Our credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences material adverse events that affect the financial condition or business outlook for the portfolio company.
The following table shows our unfunded commitments by portfolio company as of June 30, 2020 and 2019:
Unfunded Commitments(1)
(in thousands)
 
June 30, 2020
 
December 31, 2019
BlueVine Capital, Inc.
 
$
30,000

 
$
30,000

Capsule Corp.
 
30,000

 
10,000

Cohesity, Inc.
 
30,000

 

Hims, Inc.
 
25,000

 
25,000

Freshly Inc.
 
15,000

 
18,000

OfferUp Inc.
 
10,000

 
20,000

Transfix, Inc.
 
10,000

 
10,000

Curology, Inc.
 
9,000

 
15,000

Grove Collaborative, Inc.
 
5,333

 
21,750

Pencil and Pixel, Inc.
 
5,000

 

Signifyd, Inc.
 
4,000

 
10,000

Farmer's Business Network, Inc.
 
3,034

 

Sonder USA, Inc.
 
3,000

 
8,333

Mind Candy Limited
 
1,000

 

Toast, Inc.
 

 
35,000

Moda Operandi, Inc.
 

 
10,000

Nurx Inc.
 

 
5,000

OneSource Virtual, Inc.
 

 
5,000

Brooklinen, Inc.
 

 
3,000

Total
 
$
180,367

 
$
226,083

_____________
(1)
Does not include backlog of potential future commitments. Refer to “Investment Activity” above.
Distributions
We have elected to be treated, and intend to qualify annually, as a RIC under the Code. To obtain and maintain RIC tax treatment, we must distribute at least 90% of our net ordinary income and net realized short-term capital gains in excess of our net realized long-term capital losses, if any, to our stockholders. In order to avoid a non-deductible 4% U.S. federal excise tax on certain of our undistributed income, we would need to distribute during each calendar year an amount at least equal to the sum of: (a) 98% of our ordinary income (not taking into account any capital gains or losses) for such calendar year; (b) 98.2% of the amount by which our capital gains exceed our capital losses (adjusted for certain ordinary losses) for a one-year period ending on October 31 of the calendar year (unless an election is made by us to use our taxable year); and (c) certain undistributed amounts from previous years on which we paid no U.S. federal income tax. For the tax years ended December 31, 2019 and 2018, we were subject to a 4% U.S. federal excise tax and we may be subject to this tax in future years. In such cases, we will be liable for the tax only on the amount by which we do not meet the foregoing distribution requirement.
To the extent our taxable earnings fall below the total amount of our distributions for the year, a portion of those distributions may be deemed a return of capital to our stockholders. Our Adviser monitors available taxable earnings, including net investment income and realized capital gains, to determine if a return of capital may occur for the year. The tax character of distributions will be determined at the end of the taxable year. Stockholders should read any written disclosure accompanying a dividend payment carefully and should not assume that the source of any distribution is our taxable ordinary income or capital gains. The specific tax characteristics of our distributions will be reported to stockholders after the end of the taxable year.
The following table shows our cash distributions per share that have been authorized by our Board since our initial public offering to June 30, 2020. From March 5, 2014 (commencement of operations) to December 31, 2015, and during the years ended December 31, 2017 and December 31, 2018, distributions represent ordinary income as our earnings exceeded distributions. Approximately $0.24 per share of the distributions during the year ended December 31, 2016 represented a return of capital. During the year ended December 31, 2019, distributions represent ordinary income and long term capital gains. Depending on the duration of the COVID-19 pandemic and the extent of its impact on our portfolio companies’ operations and our net investment income, any future distributions to our stockholders may be for amounts less than our

55


historical distributions, may be made less frequently than historical practices, and may be made in part cash and part stock (as per each stockholder’s election), subject to a limitation that the aggregate amount of cash to be distributed to all stockholders must be at least 10% of the aggregate declared distribution for distributions declared on or before December 31, 2020, and at least 20% of the aggregate declared distribution for distributions declared on or after January 1, 2021.
Period Ended
 
Date Announced
 
Record Date
 
Payment Date
 
Per Share Amount
March 31, 2014
 
April 3, 2014
 
April 15, 2014
 
April 30, 2014
 
$
0.09

(1) 
June 30, 2014
 
May 13, 2014
 
May 30, 2014
 
June 17, 2014
 
0.30

 
September 30, 2014
 
August 11, 2014
 
August 29, 2014
 
September 16, 2014
 
0.32

 
December 31, 2014
 
October 27, 2014
 
November 28, 2014
 
December 16, 2014
 
0.36

 
December 31, 2014
 
December 3, 2014
 
December 22, 2014
 
December 31, 2014
 
0.15

(2) 
March 31, 2015
 
March 16, 2015
 
March 26, 2015
 
April 16, 2015
 
0.36

 
June 30, 2015
 
May 6, 2015
 
May 29, 2015
 
June 16, 2015
 
0.36

 
September 30, 2015
 
August 11, 2015
 
August 31, 2015
 
September 16, 2015
 
0.36

 
December 31, 2015
 
November 10, 2015
 
November 30, 2015
 
December 16, 2015
 
0.36

 
March 31, 2016
 
March 14, 2016
 
March 31, 2016
 
April 15, 2016
 
0.36

 
June 30, 2016
 
May 9, 2016
 
May 31, 2016
 
June 16, 2016
 
0.36

 
September 30, 2016
 
August 8, 2016
 
August 31, 2016
 
September 16, 2016
 
0.36

 
December 31, 2016
 
November 7, 2016
 
November 30, 2016
 
December 16, 2016
 
0.36

 
March 31, 2017
 
March 13, 2017
 
March 31, 2017
 
April 17, 2017
 
0.36

 
June 30, 2017
 
May 9, 2017
 
May 31, 2017
 
June 16, 2017
 
0.36

 
September 30, 2017
 
August 8, 2017
 
August 31, 2017
 
September 15, 2017
 
0.36

 
December 31, 2017
 
November 6, 2017
 
November 17, 2017
 
December 1, 2017
 
0.36

 
March 31, 2018
 
March 12, 2018
 
March 23, 2018
 
April 6, 2018
 
0.36

 
June 30, 2018
 
May 2, 2018
 
May 31, 2018
 
June 15, 2018
 
0.36

 
September 30, 2018
 
August 1, 2018
 
August 31, 2018
 
September 14, 2018
 
0.36

 
December 31, 2018
 
October 31, 2018
 
November 30, 2018
 
December 14, 2018
 
0.36

 
December 31, 2018
 
December 6, 2018
 
December 20, 2018
 
December 28, 2018
 
0.10

(2) 
March 31, 2019
 
March 1, 2019
 
March 20, 2019
 
March 29, 2019
 
0.36

 
June 30, 2019
 
May 1, 2019
 
May 31, 2019
 
June 14, 2019
 
0.36

 
September 30, 2019
 
July 31, 2019
 
August 30, 2019
 
September 16, 2019
 
0.36

 
December 31, 2019
 
October 30, 2019
 
November 29, 2019
 
December 16, 2019
 
0.36

 
March 31, 2020
 
February 28, 2020
 
March 16, 2020
 
March 30, 2020
 
0.36

 
June 30, 2020
 
April 30, 2020
 
June 16, 2020
 
June 30, 2020
 
0.36

 
Total cash distributions
 
 
 
 
 
 
 
$
9.24

 
_____________
(1)
The amount of this initial distribution reflected a quarterly distribution rate of $0.30 per share, prorated for the 27 days for the period from the pricing of our initial public offering on March 5, 2014 (commencement of operations), through March 31, 2014.
(2)
Represents a special distribution.
For the three and six months ended June 30, 2020 and for the year ended December 31, 2019, distributions paid were comprised of interest-sourced distributions (qualified interest income) in amounts equal to 100.0%, 100.0% and 98.8% of total distributions paid, respectively. As of June 30, 2020, we had estimated Spillover Income of $8.9 million, or $0.29 per share.
Recent Accounting Pronouncements
In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurement”, which is intended to improve the effectiveness of fair value measurement disclosures. The amendment, among other things, affects certain disclosure requirements related to transfers between Level 1 and Level 2 of the fair value hierarchy, and Level 3 fair value measurements as they relate to valuation process, unrealized gains and losses, measurement uncertainty, and significant unobservable inputs. The new guidance is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for any interim or annual period. The adoption of these rules did not have a material impact on the consolidated financial statements and disclosures.
In August 2018, the SEC adopted rules (the “SEC Release”) amending certain disclosure requirements intended to eliminate redundant, duplicative, overlapping, outdated or superseded, in light of other SEC disclosure requirements, U.S. GAAP requirements or changes in the information environment. In part, the SEC Release requires an investment company to present distributable earnings in total on the consolidated balance sheet and consolidated statement of changes in net assets, rather than showing the three components of distributable earnings as previously shown. We adopted this part of the SEC Release during the year ended December 31, 2018. The impact of the adoption of these rules on our consolidated financial statements was not material. Additionally, the SEC Release requires disclosure of changes in net assets within a registrant's

56


Form 10-Q filing on a quarter-to-date and year-to-date basis for both the current year and prior year comparative periods. We adopted the new requirement to present changes in net assets in interim financial statements within Form 10-Q filings effective January 1, 2019. The adoption of these rules did not have a material impact on the consolidated financial statements.
Recent Developments
Dividends
On July 30, 2020, the Board declared a $0.36 per share regular quarterly distribution, payable on September 15, 2020 to stockholders of record on August 31, 2020.
Recent Portfolio Activity
From July 1, 2020 through August 4, 2020, we closed $22.0 million of additional debt commitments and funded $3.9 million in new investments. TPC’s direct originations platform entered into $43.2 million of additional non-binding signed term sheets with venture growth stage companies, subject to due diligence, definitive documentation and investment committee approval, as well as compliance with TPC’s allocation policy. From July 1, 2020 through August 4, 2020, we received $29.1 million of principal prepayments generating approximately $1.0 million of prepayment fees and interest income.
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
We are subject to financial market risks, including changes in interest rates. We are also subject to risks relating to the capital markets; conditions affecting the general economy; legislative reform; and local, regional, national or global political, social or economic instability. U.S. and global capital markets and credit markets have experienced a higher level of stress due to the global COVID-19 pandemic, which has resulted in an increase in the level of volatility across such markets and in values of publicly-traded securities. Any continuation of the stresses on capital markets and credit markets, or a further increase in volatility could result in a contraction of available credit for us and/or an inability by us to access the equity or debt capital markets or could otherwise cause an inability or unwillingness of our lenders to fund their commitments to us, any of which may have a material adverse effect on our results of operations and financial condition.
Interest Rate Risk
Interest rate sensitivity refers to the change in our earnings and in the relative values of our portfolio that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a change in market interest rates will not have a material adverse effect on our net investment income.
Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. Our investment income will be affected by changes in various interest rates, including LIBOR and Prime Rates, to the extent that any debt investments include floating interest rates. Debt investments are made with either floating rates that are subject to contractual minimum interest rates for the term of the investment or fixed interest rates.
In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other central banks have reduced certain interest rates and LIBOR has decreased. A prolonged reduction in interest rates could reduce our gross investment income and could result in a decrease in our net investment income if such decreases in interest rates are not offset by a corresponding increase in the spread over Prime that we earn on any portfolio investments, a decrease in our operating expenses or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR. For example, the weighted-average annualized portfolio yield on our total debt investments decreased for the three- and six-month periods ended June 30, 2020 as compared to the comparable 2019 periods in part due to a decrease in the Prime Rate between periods.
As of June 30, 2020, a majority of the debt investments (approximately 69.7% or $469.6 million in principal balance) in our portfolio bore interest at floating rates, which generally are Prime-based, all of which have interest rate floors and some of which have interest rate caps for a limited period. Substantially all of our unfunded commitments float with changes in the Prime Rate from the date we enter into the commitment to the date of the actual draw. In addition, our interest expense will be affected by changes in the published LIBOR rate in connection with our Credit Facility; however, our 2022 Notes bear interest at a fixed rate. In addition, our 2025 Notes bear interest at a fixed rate (subject to a 1.00% increase in the fixed rate in the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs).
As of June 30, 2020, our floating rate borrowings totaled $158.0 million, which comprised of 52.2% of our outstanding debt. Due to the fact that the majority of our floating rate debt investment portfolio is subject to interest-rate floors above the current Prime Rate, small interest rate increases would generally decrease our net investment income because our interest expense would increase without a corresponding increase the spread over LIBOR or the Prime Rate that we earn on any portfolio investments; however, a decrease in interest rates would generally increase our net investment income because our interest expense attributable to borrowings under the Credit Facility would decrease. This is illustrated in the following table which shows the annual impact on net investment income of base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure from the June 30, 2020 consolidated statement of assets and liabilities:

57


Change in Interest Rates
(in thousands)
 
Increase (decrease) in interest income
 
(Increase) decrease in interest expense
 
Net increase (decrease) in net investment income
Up 300 basis points
 
$
5,565

 
$
(4,740
)
 
$
825

Up 200 basis points
 
$
1,196

 
$
(3,160
)
 
$
(1,964
)
Up 100 basis points
 
$
76

 
$
(1,580
)
 
$
(1,504
)
Up 50 basis points
 
$
19

 
$
(790
)
 
$
(771
)
Down 50 basis points
 
$

 
$
292

 
$
292

Down 100 basis points
 
$

 
$
292

 
$
292

Down 200 basis points
 
$

 
$
292

 
$
292

Down 300 basis points
 
$

 
$
292

 
$
292

This analysis is indicative of the potential impact on our investment income as of June 30, 2020, assuming an immediate and sustained change in interest rates as noted. It should be noted that we anticipate growth in our portfolio funded in part with additional borrowings and such additional borrowings, all else being equal, will increase our investment income sensitivity to interest rates, and such changes could be material. In addition, this analysis does not adjust for potential changes in our portfolio or our borrowing facilities nor does it take into account any changes in the credit performance of our loans that might occur should interest rates change.
Because it is our intention to hold loans to maturity, the fluctuating relative value of these loans that may occur due to changes in interest rate may have an impact on unrealized gains and losses during quarterly reporting periods. Based on our assessment of the interest rate risk, as of June 30, 2020, we had no hedging transactions in place as we deemed the risk acceptable, and we did not believe it was necessary to mitigate this risk at that time.
While hedging activities may mitigate our exposure to adverse fluctuations in interest rates, certain hedging transactions that we may enter into in the future, such as interest rate swap agreements, may also limit our ability to participate in the benefits of lower interest rates with respect to our portfolio investments. In addition, there can be no assurance that we will be able to effectively hedge our interest rate risk.
Substantially all of our assets and liabilities are financial in nature. As a result, changes in interest rates and other factors drive our performance more directly than does inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates.
Item 4.
Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
As of June 30, 2020 (the end of the period covered by this report), we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.
(a) Changes in Internal Controls Over Financial Reporting
Management has not identified any change in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2020 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

58


PART II - OTHER INFORMATION
Item 1.
Legal Proceedings
Neither we, the Adviser, nor our subsidiaries are currently subject to any material pending legal proceedings, other than ordinary routine litigation incidental to our businesses. We, the Adviser, and our subsidiaries may from time to time, however, be involved in litigation arising out of our operations in the normal course of business or otherwise. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not expect any current matters will materially affect our financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on our financial condition or results of operations in any future reporting period.
Item 1A.
Risk Factors
You should carefully consider the risks referenced below and all other information contained in this Quarterly Report on Form 10-Q, including our interim financial statements and the related notes thereto, before making a decision to purchase our securities. Any such risks and uncertainties are not the only ones facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse effect on our business, financial condition and/or operating results, as well as the market price of our securities.
There have been no material changes during the three months ended June 30, 2020 to the risk factors previously disclosed in our Annual Report on Form 10‑K for the year ended December 31, 2019 (filed with the SEC on March 4, 2020) and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (filed with the SEC on May 6, 2020), which you should carefully consider and could materially affect our business, financial condition or operating results.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Dividend Reinvestment Plan
During the three months ended June 30, 2020, we issued 73,369 shares of common stock under our dividend reinvestment plan. These issuances were not subject to the registration requirements under the Securities Act of 1933, as amended. The cash paid for shares of common stock issued under our dividend reinvestment plan during the three months ended June 30, 2020 was $0.4 million.
Item 3.
Defaults Upon Senior Securities
None.
Item 4.
Mine Safety Disclosures
Not applicable.
Item 5.
Other Information
None.
Item 6.
Exhibits
The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the United States Securities and Exchange Commission:

59


(1)
Incorporated by reference to Exhibit (a) to the Registrant’s Pre-Effective Amendment No. 1 to TriplePoint Venture Growth BDC Corp.’s registration statement on Form N-2 (File No. 333-191871) filed on January 22, 2014.
(2)
Incorporated by reference to Exhibit (b) to the Registrant’s Pre-Effective Amendment No. 1 to TriplePoint Venture Growth BDC Corp.’s registration statement on Form N-2 (File No. 333-191871) filed on January 22, 2014.
(3)
Incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 814-01044) filed on May 6, 2020.
(*)    Filed herewith.

60



SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
TriplePoint Venture Growth BDC Corp.
Date: August 5, 2020
 
By:
 
/s/ James P. Labe
 
 
 
 
James P. Labe
 
 
 
 
Chief Executive Officer and Chairman of the Board of Directors
 
 
 
 
(Principal Executive Officer)
 
 
 
 
TriplePoint Venture Growth BDC Corp.
Date: August 5, 2020
 
By:
 
/s/ Christopher M. Mathieu
 
 
 
 
Christopher M. Mathieu
 
 
 
 
Chief Financial Officer
 
 
 
 
(Principal Financial and Accounting Officer)



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