Attached files
| file | filename |
|---|---|
| EX-99 - EX-99 - MVC CAPITAL, INC. | a17-21381_1ex99.htm |
| EX-32 - EX-32 - MVC CAPITAL, INC. | a17-21381_1ex32.htm |
| EX-31 - EX-31 - MVC CAPITAL, INC. | a17-21381_1ex31.htm |
| EX-10 - EX-10 - MVC CAPITAL, INC. | a17-21381_1ex10.htm |
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
|
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
|
|
|
For the quarterly period ended July 31, 2017 or | |
|
|
|
|
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 814-00201
MVC CAPITAL, INC.
(Exact name of the registrant as specified in its charter)
|
DELAWARE |
|
94-3346760 |
|
|
|
|
|
287 Bowman Avenue |
|
10577 |
|
(Address of principal |
|
(Zip Code) |
Registrant’s telephone number, including area code: (914) 701-0310
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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer oAccelerated filer x Non-accelerated filero Smaller reporting companyo Emerging growth company o
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
There were 21,114,105 shares of the registrant’s common stock, $.01 par value, outstanding as of September 11, 2017.
CONSOLIDATED FINANCIAL STATEMENTS
MVC Capital, Inc.
|
|
|
July 31, |
|
October 31, |
| ||
|
|
|
2017 |
|
2016 |
| ||
|
|
|
(Unaudited) |
|
|
| ||
|
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Assets |
|
|
|
|
| ||
|
Cash |
|
$ |
118,753,247 |
|
$ |
19,819,548 |
|
|
Restricted cash (cost $300,176 and $800,527) |
|
300,253 |
|
800,527 |
| ||
|
Cash equivalents (cost $772,055 and $394,612) |
|
772,055 |
|
394,612 |
| ||
|
Investments at fair value |
|
|
|
|
| ||
|
U.S. Treasury obligations (cost $0 and $34,998,593) |
|
— |
|
34,991,681 |
| ||
|
Non-control/Non-affiliated investments (cost $177,520,484 and $150,348,963) |
|
153,428,098 |
|
123,189,755 |
| ||
|
Affiliate investments (cost $141,259,885 and $130,484,393) |
|
89,938,950 |
|
169,426,770 |
| ||
|
Control investments (cost $84,444,213 and $93,878,518) |
|
59,669,247 |
|
67,503,229 |
| ||
|
Total investments at fair value (cost $403,224,582 and $409,710,467) |
|
303,036,295 |
|
395,111,435 |
| ||
|
Escrow receivables, net of reserves |
|
— |
|
9,151,805 |
| ||
|
Dividends and interest receivables, net of reserves |
|
1,237,078 |
|
3,595,357 |
| ||
|
Deferred financing fees |
|
782,974 |
|
1,201,473 |
| ||
|
Fee and other receivables |
|
1,496,607 |
|
2,098,625 |
| ||
|
Prepaid expenses |
|
358,011 |
|
192,712 |
| ||
|
|
|
|
|
|
| ||
|
Total assets |
|
$ |
426,736,520 |
|
$ |
432,366,094 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Liabilities |
|
|
|
|
| ||
|
Senior notes1 |
|
$ |
112,540,470 |
|
$ |
112,283,745 |
|
|
Revolving credit facility II |
|
— |
|
35,000,000 |
| ||
|
Provision for incentive compensation (Note 11) |
|
7,672,101 |
|
1,946,555 |
| ||
|
Professional fees payable |
|
240,626 |
|
583,049 |
| ||
|
Management fee payable |
|
1,044,505 |
|
1,290,230 |
| ||
|
Accrued expenses and liabilities |
|
593,863 |
|
715,538 |
| ||
|
Guarantees |
|
217,224 |
|
— |
| ||
|
Interest payable |
|
345,611 |
|
348,525 |
| ||
|
Management fee payable - Asset Management |
|
89,240 |
|
151,053 |
| ||
|
Consulting fees payable |
|
343,620 |
|
151,943 |
| ||
|
Portfolio fees payable - Asset Management |
|
386,572 |
|
336,297 |
| ||
|
Transaction fees payable |
|
1,486,900 |
|
— |
| ||
|
Taxes payable |
|
1,574 |
|
1,381 |
| ||
|
|
|
|
|
|
| ||
|
Total liabilities |
|
124,962,306 |
|
152,808,316 |
| ||
|
|
|
|
|
|
| ||
|
Commitments and Contingencies (Note 10) |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Shareholders’ equity |
|
|
|
|
| ||
|
Common stock, $0.01 par value; 150,000,000 shares authorized; 28,304,448 shares issued and 22,556,412 and 22,556,412 shares outstanding as of July 31, 2017 and October 31, 2016, respectively |
|
283,044 |
|
283,044 |
| ||
|
Additional paid-in-capital |
|
418,298,709 |
|
418,298,709 |
| ||
|
Accumulated earnings |
|
120,479,685 |
|
128,135,727 |
| ||
|
Dividends paid to stockholders |
|
(154,247,487 |
) |
(145,112,140 |
) | ||
|
Accumulated net realized gain (loss) |
|
73,600,388 |
|
(51,542,156 |
) | ||
|
Net unrealized depreciation |
|
(100,127,173 |
) |
(13,992,454 |
) | ||
|
Treasury stock, at cost, 5,748,036 and 5,748,036 shares held, respectively |
|
(56,512,952 |
) |
(56,512,952 |
) | ||
|
|
|
|
|
|
| ||
|
Total shareholders’ equity |
|
301,774,214 |
|
279,557,778 |
| ||
|
|
|
|
|
|
| ||
|
Total liabilities and shareholders’ equity |
|
$ |
426,736,520 |
|
$ |
432,366,094 |
|
|
|
|
|
|
|
| ||
|
Net asset value per share |
|
$ |
13.38 |
|
$ |
12.39 |
|
1 Reflects reductions of approximately $1.9 million and approximately $2.1 million as of July 31, 2017 and October 31, 2016, respectively, related to the reclassification of the unamortized debt issuance costs related to the Senior notes per the adoption of ASU 2015-3.
The accompanying notes are an integral part of these consolidated financial statements.
MVC Capital, Inc.
Consolidated Statements of Operations
(Unaudited)
|
|
|
For the Nine Month Period |
|
For the Nine Month Period |
| ||
|
|
|
November 1, 2016 to |
|
November 1, 2015 to |
| ||
|
|
|
July 31, 2017 |
|
July 31, 2016 |
| ||
|
Operating Income: |
|
|
|
|
| ||
|
Dividend income |
|
|
|
|
| ||
|
Non-control/Non-affiliated investments |
|
$ |
— |
|
$ |
284 |
|
|
Affiliate investments |
|
— |
|
12,500,000 |
| ||
|
Control investments |
|
— |
|
97,101 |
| ||
|
|
|
|
|
|
| ||
|
Total dividend income |
|
— |
|
12,597,385 |
| ||
|
|
|
|
|
|
| ||
|
Interest income |
|
|
|
|
| ||
|
Non-control/Non-affiliated investments |
|
8,591,364 |
|
9,038,608 |
| ||
|
Affiliate investments |
|
1,622,040 |
|
1,715,641 |
| ||
|
Control investments |
|
469,656 |
|
240,965 |
| ||
|
|
|
|
|
|
| ||
|
Total interest income |
|
10,683,060 |
|
10,995,214 |
| ||
|
|
|
|
|
|
| ||
|
Payment-in-kind/Deferred interest income |
|
|
|
|
| ||
|
Non-control/Non-affiliated investments |
|
807,418 |
|
3,772,909 |
| ||
|
Affiliate investments |
|
602,856 |
|
430,496 |
| ||
|
Control investments |
|
120,551 |
|
116,962 |
| ||
|
|
|
|
|
|
| ||
|
Total payment-in-kind/Deferred interest income |
|
1,530,825 |
|
4,320,367 |
| ||
|
|
|
|
|
|
| ||
|
Fee income |
|
|
|
|
| ||
|
Non-control/Non-affiliated investments |
|
302,879 |
|
100,757 |
| ||
|
Affiliate investments |
|
1,192,485 |
|
444,000 |
| ||
|
Control investments |
|
52,420 |
|
2,418,750 |
| ||
|
|
|
|
|
|
| ||
|
Total fee income |
|
1,547,784 |
|
2,963,507 |
| ||
|
|
|
|
|
|
| ||
|
Fee income - Asset Management 1 |
|
|
|
|
| ||
|
Portfolio fees |
|
615,448 |
|
743,595 |
| ||
|
Management fees |
|
237,262 |
|
329,881 |
| ||
|
|
|
|
|
|
| ||
|
Total fee income - Asset Management |
|
852,710 |
|
1,073,476 |
| ||
|
|
|
|
|
|
| ||
|
Total operating income |
|
14,614,379 |
|
31,949,949 |
| ||
|
|
|
|
|
|
| ||
|
Operating Expenses: |
|
|
|
|
| ||
|
Interest and other borrowing costs |
|
7,792,549 |
|
7,613,976 |
| ||
|
Net Incentive compensation (Note 11) |
|
6,821,626 |
|
(2,607,115 |
) | ||
|
Management fee |
|
4,902,716 |
|
5,869,533 |
| ||
|
Other expenses |
|
787,415 |
|
348,332 |
| ||
|
Consulting fees |
|
746,555 |
|
1,108,790 |
| ||
|
Audit & tax preparation fees |
|
593,000 |
|
205,381 |
| ||
|
Legal fees |
|
472,976 |
|
929,155 |
| ||
|
Portfolio fees - Asset Management 1 |
|
461,586 |
|
557,696 |
| ||
|
Directors’ fees and expenses |
|
317,514 |
|
320,000 |
| ||
|
Insurance |
|
208,102 |
|
224,492 |
| ||
|
Management fee - Asset Management 1 |
|
177,946 |
|
247,411 |
| ||
|
Administration |
|
150,575 |
|
161,308 |
| ||
|
Public relations fees |
|
136,000 |
|
132,000 |
| ||
|
Printing and postage |
|
38,600 |
|
20,415 |
| ||
|
|
|
|
|
|
| ||
|
Total operating expenses |
|
23,607,160 |
|
15,131,374 |
| ||
|
|
|
|
|
|
| ||
|
Less: Voluntary Expense Waiver by Adviser 2 |
|
(112,500 |
) |
(112,500 |
) | ||
|
Less: Voluntary Management Fee Waiver by Adviser 3 |
|
(1,225,679 |
) |
(1,467,383 |
) | ||
|
Less: Voluntary Incentive Fee Waiver by Adviser 4 |
|
— |
|
(1,000,000 |
) | ||
|
|
|
|
|
|
| ||
|
Total waivers |
|
(1,338,179 |
) |
(2,579,883 |
) | ||
|
|
|
|
|
|
| ||
|
Net operating (loss) income before taxes |
|
(7,654,602 |
) |
19,398,458 |
| ||
|
|
|
|
|
|
| ||
|
Tax Expenses: |
|
|
|
|
| ||
|
Current tax expense |
|
1,440 |
|
1,316 |
| ||
|
|
|
|
|
|
| ||
|
Total tax expense |
|
1,440 |
|
1,316 |
| ||
|
|
|
|
|
|
| ||
|
Net operating (loss) income |
|
(7,656,042 |
) |
19,397,142 |
| ||
|
|
|
|
|
|
| ||
|
Net Realized and Unrealized Gain (Loss) on Investments: |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Net realized gain (loss) on investments |
|
|
|
|
| ||
|
Short term investments |
|
229,812 |
|
125,116 |
| ||
|
Non-control/Non-affiliated investments |
|
(620,077 |
) |
(8,822,166 |
) | ||
|
Affiliate investments |
|
115,430,586 |
|
(30,996 |
) | ||
|
Control investments |
|
10,097,674 |
|
(31,373,017 |
) | ||
|
Foreign currency |
|
4,549 |
|
— |
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Total net realized gain (loss) on investments |
|
125,142,544 |
|
(40,101,063 |
) | ||
|
|
|
|
|
|
| ||
|
Net unrealized (depreciation) appreciation on investments |
|
(86,134,719 |
) |
18,223,347 |
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Net realized and unrealized gain (loss) on investments |
|
39,007,825 |
|
(21,877,716 |
) | ||
|
|
|
|
|
|
| ||
|
Net increase (decrease) in net assets resulting from operations |
|
$ |
31,351,783 |
|
$ |
(2,480,574 |
) |
|
|
|
|
|
|
| ||
|
Net increase (decrease) in net assets per share resulting from operations |
|
$ |
1.39 |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
| ||
|
Dividends declared per share |
|
$ |
0.405 |
|
$ |
0.575 |
|
|
|
|
|
|
|
| ||
|
Weighted average number of shares outstanding 4 |
|
22,556,412 |
|
22,702,821 |
| ||
1 These items are related to the management of the MVC Private Equity Fund, L.P. (“PE Fund”). Please see Note 10 “Management” for more information.
2 Reflects the nine month portion of the TTG Advisers’ voluntary waiver of $150,000 of expenses for the 2017 and 2016 fiscal years,
that the Company would otherwise be obligated to reimburse TTG Advisers under the Advisory Agreement (the “Voluntary
Waiver”). Please see Note 10 “Management” for more information.
3 Reflects the nine month portion of the TTG Advisers’ voluntary waiver of .50% of the management fee for the 2017 and 2016 fiscal years.
Please see Note 10 “Management” for more information.
4 Please see Note 13 “Dividends and Distributions to Shareholders, Share Repurchase Program and Tender Offer” for more information.
The accompanying notes are an integral part of these consolidated financial statements.
MVC Capital, Inc.
Consolidated Statements of Operations
(Unaudited)
|
|
|
For the Quarter |
|
For the Quarter |
| ||
|
|
|
May 1, 2017 to |
|
May 1, 2016 to |
| ||
|
|
|
July 31, 2017 |
|
July 31, 2016 |
| ||
|
Operating Income: |
|
|
|
|
| ||
|
Dividend income |
|
|
|
|
| ||
|
Non-control/Non-affiliated investments |
|
$ |
— |
|
$ |
— |
|
|
Affiliate investments |
|
— |
|
2,500,000 |
| ||
|
|
|
|
|
|
| ||
|
Total dividend income |
|
— |
|
2,500,000 |
| ||
|
|
|
|
|
|
| ||
|
Interest income |
|
|
|
|
| ||
|
Non-control/Non-affiliated investments |
|
4,838,293 |
|
3,077,827 |
| ||
|
Affiliate investments |
|
546,070 |
|
580,257 |
| ||
|
Control investments |
|
136,885 |
|
78,175 |
| ||
|
|
|
|
|
|
| ||
|
Total interest income |
|
5,521,248 |
|
3,736,259 |
| ||
|
|
|
|
|
|
| ||
|
Payment-in-kind/Deferred interest income |
|
|
|
|
| ||
|
Non-control/Non-affiliated investments |
|
250,201 |
|
1,078,829 |
| ||
|
Affiliate investments |
|
228,752 |
|
172,235 |
| ||
|
Control investments |
|
23,992 |
|
39,272 |
| ||
|
|
|
|
|
|
| ||
|
Total payment-in-kind/Deferred interest income |
|
502,945 |
|
1,290,336 |
| ||
|
|
|
|
|
|
| ||
|
Fee income |
|
|
|
|
| ||
|
Non-control/Non-affiliated investments |
|
158,237 |
|
33,952 |
| ||
|
Affiliate investments |
|
839,152 |
|
80,000 |
| ||
|
Control investments |
|
— |
|
37,500 |
| ||
|
|
|
|
|
|
| ||
|
Total fee income |
|
997,389 |
|
151,452 |
| ||
|
|
|
|
|
|
| ||
|
Fee income - Asset Management 1 |
|
|
|
|
| ||
|
Portfolio fees |
|
194,987 |
|
245,772 |
| ||
|
Management fees |
|
89,252 |
|
80,946 |
| ||
|
|
|
|
|
|
| ||
|
Total fee income - Asset Management |
|
284,239 |
|
326,718 |
| ||
|
|
|
|
|
|
| ||
|
Total operating income |
|
7,305,821 |
|
8,004,765 |
| ||
|
|
|
|
|
|
| ||
|
Operating Expenses: |
|
|
|
|
| ||
|
Net Incentive compensation (Note 11) |
|
5,076,509 |
|
(1,512,166 |
) | ||
|
Interest and other borrowing costs |
|
2,648,600 |
|
2,487,762 |
| ||
|
Management fee |
|
1,392,674 |
|
1,932,195 |
| ||
|
Other expenses |
|
306,761 |
|
105,225 |
| ||
|
Consulting fees |
|
198,000 |
|
529,588 |
| ||
|
Portfolio fees - Asset Management 1 |
|
146,241 |
|
184,329 |
| ||
|
Directors’ fees and expenses |
|
105,000 |
|
105,000 |
| ||
|
Insurance |
|
67,086 |
|
72,275 |
| ||
|
Management fee - Asset Management 1 |
|
66,938 |
|
60,710 |
| ||
|
Audit & tax preparation fees |
|
66,000 |
|
69,781 |
| ||
|
Administration |
|
51,328 |
|
50,267 |
| ||
|
Public relations fees |
|
45,000 |
|
40,000 |
| ||
|
Printing and postage |
|
2,335 |
|
194 |
| ||
|
Legal fees |
|
(36,434 |
) |
346,099 |
| ||
|
|
|
|
|
|
| ||
|
Total operating expenses |
|
10,136,038 |
|
4,471,259 |
| ||
|
|
|
|
|
|
| ||
|
Less: Voluntary Expense Waiver by Adviser 2 |
|
(37,500 |
) |
(37,500 |
) | ||
|
Less: Voluntary Management Fee Waiver by Adviser 3 |
|
(348,168 |
) |
(483,048 |
) | ||
|
Less: Voluntary Incentive Fee Waiver by Adviser 4 |
|
— |
|
— |
| ||
|
|
|
|
|
|
| ||
|
Total waivers |
|
(385,668 |
) |
(520,548 |
) | ||
|
|
|
|
|
|
| ||
|
Net operating (loss) income before taxes |
|
(2,444,549 |
) |
4,054,054 |
| ||
|
|
|
|
|
|
| ||
|
Tax Expenses: |
|
|
|
|
| ||
|
Current tax expense |
|
480 |
|
438 |
| ||
|
|
|
|
|
|
| ||
|
Total tax expense |
|
480 |
|
438 |
| ||
|
|
|
|
|
|
| ||
|
Net operating (loss) income |
|
(2,445,029 |
) |
4,053,616 |
| ||
|
|
|
|
|
|
| ||
|
Net Realized and Unrealized Gain (Loss) on |
|
|
|
|
| ||
|
Investments: |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Net realized (loss) gain on investments |
|
|
|
|
| ||
|
Short term investments |
|
46,725 |
|
215,543 |
| ||
|
Non-control/Non-affiliated investments |
|
(621,285 |
) |
(1,185,631 |
) | ||
|
Affiliate investments |
|
114,580,586 |
|
15,418 |
| ||
|
Control investments |
|
234,026 |
|
210,065 |
| ||
|
Foreign currency |
|
— |
|
— |
| ||
|
|
|
|
|
|
| ||
|
Total net realized gain (loss) on investments |
|
114,240,052 |
|
(744,605 |
) | ||
|
|
|
|
|
|
| ||
|
Net unrealized depreciation on investments |
|
(87,889,394 |
) |
(6,844,625 |
) | ||
|
|
|
|
|
|
| ||
|
Net realized and unrealized gain (loss) on investments |
|
26,350,658 |
|
(7,589,230 |
) | ||
|
|
|
|
|
|
| ||
|
Net increase (decrease) in net assets resulting from operations |
|
$ |
23,905,629 |
|
$ |
(3,535,614 |
) |
|
|
|
|
|
|
| ||
|
Net increase (decrease) in net assets per share resulting from operations |
|
$ |
1.06 |
|
$ |
(0.16 |
) |
|
|
|
|
|
|
| ||
|
Dividends declared per share |
|
$ |
0.135 |
|
$ |
0.135 |
|
|
|
|
|
|
|
| ||
|
Weighted average number of shares outstanding 4 |
|
22,556,412 |
|
22,702,821 |
| ||
1 These items are related to the management of the MVC Private Equity Fund, L.P. (“PE Fund”). Please see Note 10 “Management” for more information.
2 Reflects the quarterly portion of the TTG Advisers’ voluntary waiver of $150,000 of expenses for the 2017 and 2016 fiscal years,
that the Company would otherwise be obligated to reimburse TTG Advisers under the Advisory Agreement (the “Voluntary
Waiver”). Please see Note 10 “Management” for more information.
3 Reflects the quarterly portion of the TTG Advisers’ voluntary waiver of .50% of the management fee for the 2017 and 2016 fiscal years.
Please see Note 10 “Management” for more information.
4 Please see Note 13 “Dividends and Distributions to Shareholders, Share Repurchase Program and Tender Offer” for more information.
The accompanying notes are an integral part of these consolidated financial statements.
MVC Capital, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
For the Nine Month Period |
|
For the Nine Month Period |
| ||
|
|
|
November 1, 2016 |
|
November 1, 2015 |
| ||
|
|
|
July 31, 2017 |
|
July 31, 2016 |
| ||
|
Cash flows from Operating Activities: |
|
|
|
|
| ||
|
Net increase (decrease) in net assets resulting from operations |
|
$ |
31,351,783 |
|
$ |
(2,480,574 |
) |
|
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: |
|
|
|
|
| ||
|
Net realized (loss) gain |
|
(125,142,544 |
) |
40,101,063 |
| ||
|
Net change in unrealized (appreciation) depreciation |
|
86,134,719 |
|
(18,223,347 |
) | ||
|
Amortization of premiums (discounts) and fees |
|
(276,030 |
) |
(53,301 |
) | ||
|
Increase in accrued payment-in-kind dividends and interest |
|
(1,405,278 |
) |
(6,698,463 |
) | ||
|
Amortization of deferred financing fees |
|
901,092 |
|
767,348 |
| ||
|
Changes in operating assets and liabilities: |
|
|
|
|
| ||
|
Restricted cash |
|
500,274 |
|
499,670 |
| ||
|
Restricted cash equivalents |
|
— |
|
5,503,000 |
| ||
|
Dividends, interest and fees receivable |
|
2,358,279 |
|
2,394,917 |
| ||
|
Fee and other receivables |
|
602,018 |
|
527,952 |
| ||
|
Escrow receivables, net of reserves |
|
9,151,805 |
|
(35,057,482 |
) | ||
|
Prepaid expenses |
|
(165,299 |
) |
(8,495,076 |
) | ||
|
Incentive compensation (Note 11) |
|
5,725,546 |
|
(3,607,115 |
) | ||
|
Other liabilities |
|
954,495 |
|
(1,139,157 |
) | ||
|
Purchases of equity investments |
|
(1,187,101 |
) |
(1,992,242 |
) | ||
|
Purchases of debt instruments |
|
(6,209,282 |
) |
(39,155,640 |
) | ||
|
Purchases of short-term investments |
|
(49,954,511 |
) |
(119,857,875 |
) | ||
|
Proceeds from equity investments (1) |
|
65,770,471 |
|
36,848,989 |
| ||
|
Proceeds from debt instruments |
|
39,378,619 |
|
22,917,871 |
| ||
|
Sales/maturities of short-term investments |
|
85,183,301 |
|
209,805,021 |
| ||
|
|
|
|
|
|
| ||
|
Net cash provided by operating activities |
|
143,672,357 |
|
82,766,571 |
| ||
|
|
|
|
|
|
| ||
|
Cash flows from Financing Activities: |
|
|
|
|
| ||
|
Borrowings from revolving credit facility |
|
50,000,000 |
|
136,300,000 |
| ||
|
Repayments from revolving credit facility |
|
(85,000,000 |
) |
(189,300,000 |
) | ||
|
Repayments from bridge loan |
|
— |
|
(8,000,000 |
) | ||
|
Financing fees paid |
|
(225,868 |
) |
(1,803,777 |
) | ||
|
Distributions paid to shareholders |
|
(8,934,067 |
) |
(13,054,122 |
) | ||
|
Repurchases of common stock under dividend reinvestment plan |
|
(201,280 |
) |
— |
| ||
|
|
|
|
|
|
| ||
|
Net cash used in financing activities |
|
(44,361,215 |
) |
(75,857,899 |
) | ||
|
|
|
|
|
|
| ||
|
Net change in cash and cash equivalents for the period |
|
99,311,142 |
|
6,908,672 |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents, beginning of period |
|
$ |
20,214,160 |
|
$ |
10,311,567 |
|
|
|
|
|
|
|
| ||
|
Cash and cash equivalents, end of period |
|
$ |
119,525,302 |
|
$ |
17,220,239 |
|
|
|
|
|
|
|
| ||
(1) For the nine month period ended July 31, 2017, proceeds from equity investments includes approximately $1.0 million from escrow receivables, net of reserves.
During the nine month periods ended July 31, 2017 and 2016 MVC Capital, Inc. paid $6,319,251 and $6,404,189 in interest expense, respectively.
During the nine month periods ended July 31, 2017 and 2016 MVC Capital, Inc. paid $1,278 and $930 in income taxes, respectively.
Non-cash activity:
During the nine month periods ended July 31, 2017 and 2016, MVC Capital, Inc. recorded payment in-kind dividend and interest of $1,405,288 and $6,698,463, respectively. This amount was added to the principal balance of the investments and recorded as dividend/interest income.
During the nine month periods ended July 31, 2017 and 2016, the Plan Agent purchased 21,724 and 34,095 shares of common stock, respectively, in the open market in order to satisfy the reinvestment portion of our dividends.
On December 24, 2015, as part of Inland’s restructuring, the Company obtained a MVC Environmental, Inc. $6.0 million senior secured note and 950 shares of its common stock.
On March 7, 2017, the Company exchanged its shares of MVC Turf, the holding company which owned the Company’s LLC interest in Turf, for approximately $3.8 million of additional subordinated debt in Turf.
On July 5, 2017, the Company received gross consideration for its investment in U.S. Gas valued at approximately $126.1 million, including approximately $11.0 million for the repayment of its two outstanding loans from the Company. The fair value of the consideration received by the Company for its equity investment in U.S. Gas was $115.1 million. As a result of the gross consideration received, the Company realized a gain of approximately $114.6 million. The $115.1 million is comprised of: (i) cash of approximately $50.0 million; (ii) 9.5% second-lien callable notes due in July 2025 with a face amount of approximately $40.5 million (before certain post-closing and indemnification adjustments, if any); and (iii) 3,282,982 Crius trust units valued at approximately $24.6 million at the time of closing.
The accompanying notes are an integral part of these consolidated financial statements.
MVC Capital, Inc.
Consolidated Statements of Changes in Net Assets
|
|
|
For the Nine Month Period |
|
For the Nine Month Period |
|
For the Year Ended |
| |||
|
|
|
July 31, 2017 |
|
July 31, 2016 |
|
October 31, 2016 |
| |||
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
| |||
|
Operations: |
|
|
|
|
|
|
| |||
|
Net operating (loss) gain |
|
$ |
(7,656,042 |
) |
$ |
19,397,142 |
|
$ |
19,327,746 |
|
|
Net realized gain (loss) on investments |
|
125,142,544 |
|
(40,101,063 |
) |
(45,157,415 |
) | |||
|
Net change in unrealized (depreciation) appreciation on investments |
|
(86,134,719 |
) |
18,223,347 |
|
28,627,844 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Net increase (decrease) in net assets from operations |
|
31,351,783 |
|
(2,480,574 |
) |
2,798,175 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Shareholder Distributions from: |
|
|
|
|
|
|
| |||
|
Income |
|
(9,135,347 |
) |
(13,054,122 |
) |
(16,099,238 |
) | |||
|
Return of capital |
|
— |
|
— |
|
— |
| |||
|
|
|
|
|
|
|
|
| |||
|
Net decrease in net assets from shareholder distributions |
|
(9,135,347 |
) |
(13,054,122 |
) |
(16,099,238 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Capital Share Transactions: |
|
|
|
|
|
|
| |||
|
Issuance of common stock under dividend reinvestment plan |
|
201,280 |
|
— |
|
328,509 |
| |||
|
Repurchase of common stock under dividend reinvestment plan |
|
(201,280 |
) |
— |
|
(328,509 |
) | |||
|
Repurchase of common stock |
|
— |
|
— |
|
(1,216,746 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Net decrease in net assets from capital share transactions |
|
— |
|
— |
|
(1,216,746 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Total increase (decrease) in net assets |
|
22,216,436 |
|
(15,534,696 |
) |
(14,517,809 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Net assets, beginning of period/year |
|
279,557,778 |
|
294,075,587 |
|
294,075,587 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Net assets, end of period/year |
|
$ |
301,774,214 |
|
$ |
278,540,891 |
|
$ |
279,557,778 |
|
|
|
|
|
|
|
|
|
| |||
|
Common shares outstanding, end of period/year |
|
22,556,412 |
|
22,702,821 |
|
22,556,412 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Undistributed net operating income |
|
$ |
— |
|
$ |
6,343,020 |
|
$ |
3,228,508 |
|
The accompanying notes are an integral part of these consolidated financial statements.
MVC Capital, Inc.
Consolidated Selected Per Share Data and Ratios
|
|
|
For the Nine Month Period |
|
For the Nine Month Period |
|
For the Year Ended |
| |||
|
|
|
July 31, 2017 |
|
July 31, 2016 |
|
October 31, 2016 |
| |||
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
| |||
|
|
|
|
|
|
|
|
| |||
|
Net asset value, beginning of period/year |
|
$ |
12.39 |
|
$ |
12.95 |
|
$ |
12.95 |
|
|
|
|
|
|
|
|
|
| |||
|
Gain from operations: |
|
|
|
|
|
|
| |||
|
Net operating (loss) gain |
|
(0.34 |
) |
0.85 |
|
0.85 |
| |||
|
Net realized and unrealized gain (loss) on investments |
|
1.73 |
|
(0.96 |
) |
(0.73 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Total gain from investment operations |
|
1.39 |
|
(0.11 |
) |
0.12 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Less distributions from: |
|
|
|
|
|
|
| |||
|
Income |
|
(0.40 |
) |
(0.57 |
) |
(0.71 |
) | |||
|
Return of capital |
|
— |
|
— |
|
— |
| |||
|
|
|
|
|
|
|
|
| |||
|
Total distributions |
|
(0.40 |
) |
(0.57 |
) |
(0.71 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Capital share transactions |
|
|
|
|
|
|
| |||
|
Anti-dilutive effect of share repurchase program |
|
— |
|
— |
|
0.03 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Total capital share transactions |
|
— |
|
— |
|
0.03 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Net asset value, end of period/year |
|
$ |
13.38 |
|
$ |
12.27 |
|
$ |
12.39 |
|
|
|
|
|
|
|
|
|
| |||
|
Market value, end of period/year |
|
$ |
10.39 |
|
$ |
8.08 |
|
$ |
8.69 |
|
|
|
|
|
|
|
|
|
| |||
|
Market discount |
|
(22.35 |
)% |
(34.15 |
)% |
(29.86 |
)% | |||
|
|
|
|
|
|
|
|
| |||
|
Total Return - At NAV (a) |
|
11.46 |
% |
(0.80 |
)% |
1.26 |
% | |||
|
|
|
|
|
|
|
|
| |||
|
Total Return - At Market (a) |
|
24.87 |
% |
4.67 |
% |
14.32 |
% | |||
|
|
|
|
|
|
|
|
| |||
|
Ratios and Supplemental Data: |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
| |||
|
Portfolio turnover ratio |
|
2.56 |
% |
12.77 |
% |
13.74 |
% | |||
|
|
|
|
|
|
|
|
| |||
|
Net assets, end of period/year (in thousands) |
|
$ |
301,775 |
|
$ |
278,541 |
|
$ |
279,558 |
|
|
|
|
|
|
|
|
|
| |||
|
Ratios to average net assets: |
|
|
|
|
|
|
| |||
|
Expenses including tax expense |
|
10.42 |
%(c) |
5.88 |
%(c) |
6.35 |
% | |||
|
Expenses excluding tax expense |
|
10.42 |
%(c) |
5.88 |
%(c) |
6.35 |
% | |||
|
|
|
|
|
|
|
|
| |||
|
Net operating (loss) income before tax expense |
|
(3.58 |
)%(c) |
9.09 |
%(c) |
6.81 |
% | |||
|
Net operating (loss) income after tax expense |
|
(3.58 |
)%(c) |
9.09 |
%(c) |
6.81 |
% | |||
|
|
|
|
|
|
|
|
| |||
|
Ratios to average net assets excluding waivers: |
|
|
|
|
|
|
| |||
|
Expenses including tax expense |
|
11.04 |
%(c) |
7.09 |
%(c) |
7.43 |
% | |||
|
Expenses excluding tax expense |
|
11.04 |
%(c) |
7.09 |
%(c) |
7.43 |
% | |||
|
|
|
|
|
|
|
|
| |||
|
Net operating (loss) income before tax expense |
|
(4.21 |
)%(c) |
7.88 |
%(c) |
5.74 |
% | |||
|
Net operating (loss) income after tax expense |
|
(4.21 |
)%(c) |
7.88 |
%(c) |
5.74 |
% | |||
|
|
|
|
|
|
|
|
| |||
(a) Total annual return is historical and assumes changes in share price, reinvestments of all dividends and distributions, and no sales charge for the period/year.
(b) Supplemental Ratio information
|
Ratios to average net assets: (b) |
|
|
|
|
|
|
|
|
Expenses excluding incentive compensation |
|
7.22 |
%(c) |
7.10 |
%(c) |
7.07 |
% |
|
Expenses excluding incentive compensation, interest and other borrowing costs |
|
7.85 |
%(c) |
3.53 |
%(c) |
3.47 |
% |
|
|
|
|
|
|
|
|
|
|
Net operating income (loss) before incentive compensation |
|
(0.39 |
)%(c) |
7.87 |
%(c) |
6.09 |
% |
|
Net operating income before incentive compensation, interest and other borrowing costs |
|
3.26 |
%(c) |
11.44 |
%(c) |
9.69 |
% |
|
|
|
|
|
|
|
|
|
|
Ratios to average net assets excluding waivers: (b) |
|
|
|
|
|
|
|
|
Expenses excluding incentive compensation |
|
3.58 |
%(c) |
8.31 |
%(c) |
8.15 |
% |
|
Expenses excluding incentive compensation, interest and other borrowing costs |
|
4.21 |
%(c) |
4.74 |
%(c) |
4.55 |
% |
|
|
|
|
|
|
|
|
|
|
Net operating income (loss) before incentive compensation |
|
(1.02 |
)%(c) |
6.66 |
%(c) |
5.02 |
% |
|
Net operating income before incentive compensation, interest and other borrowing costs |
|
2.63 |
%(c) |
10.23 |
%(c) |
8.62 |
% |
(c) Annualized.
The accompanying notes are an integral part of these consolidated financial statements.
MVC Capital, Inc.
Consolidated Schedule of Investments
July 31, 2017
(Unaudited)
|
Company |
|
Industry |
|
Investment |
|
Principal |
|
Cost |
|
Fair Value/Market Value |
| |||
|
|
|
|
|
|
|
|
| |||||||
|
Non-control/Non-affiliated investments- 50.84% (a, c, f, g) |
|
|
|
|
|
|
| |||||||
|
Actelis Networks, Inc. |
|
Technology Investment |
|
Common Stock (150,602 shares) (d, i) |
|
|
|
$ |
5,000,003 |
|
— |
| ||
|
Biovation Acquisition Co. |
|
Manufacturer of Laminate Material and Composites |
|
Common Stock (90 shares) (d) |
|
|
|
784,622 |
|
— |
| |||
|
Custom Alloy Corporation |
|
Manufacturer of Pipe Fittings and Forgings |
|
Second Lien Loan 10.1000% Cash, 04/30/2020 (h, k) |
|
$ |
24,425,299 |
|
24,425,299 |
|
$ |
17,665,079 |
| |
|
|
|
|
|
Unsecured Subordinated Loan 12.0000% Cash, 03/31/2018 (h, k) |
|
3,000,000 |
|
3,000,000 |
|
2,823,336 |
| |||
|
|
|
|
|
|
|
|
|
27,425,299 |
|
20,488,415 |
| |||
|
Dukane IAS,LLC |
|
Welding Equipment Manufacturer |
|
Second Lien Note 10.5000% Cash, 2.5000% PIK, 11/17/2020 (b, k) |
|
7,209,686 |
|
7,112,541 |
|
7,281,774 |
| |||
|
FDS, Inc. |
|
Software |
|
Senior Subordinated Debt 12.0000% Cash, 11/30/2017 (k) |
|
2,353,156 |
|
2,353,156 |
|
2,353,156 |
| |||
|
FOLIOfn, Inc. |
|
Technology Investment - Financial Services |
|
Preferred Stock (5,802,259 shares) (d, i) |
|
|
|
15,000,000 |
|
5,648,000 |
| |||
|
HTI Technologies and Industries, Inc. |
|
Electronic Component Manufacturing |
|
Second Lien Note 12.0000% Cash, 2.0000% PIK, 06/21/2018 (b, k) |
|
9,827,811 |
|
9,787,748 |
|
9,708,861 |
| |||
|
Initials, Inc. |
|
Consumer Products |
|
Senior Subordinated Debt 12.0000% Cash, 3.0000% PIK, 06/23/2020 (b, k) |
|
4,818,874 |
|
4,818,874 |
|
4,364,970 |
| |||
|
Legal Solutions Holdings, Inc. |
|
Business Services |
|
Senior Subordinated Debt 12.0000% Cash, 3.0000% PIK, 09/12/2018 (b, k) |
|
11,367,537 |
|
11,372,066 |
|
11,481,213 |
| |||
|
MainStream Data, Inc. |
|
Technology Investment |
|
Common Stock (5,786 shares) (d, i) |
|
|
|
3,750,000 |
|
— |
| |||
|
Morey’s Seafood International, LLC |
|
Food Services |
|
Second Lien Loan 10.0000% Cash, 4.0000% PIK, 08/12/2018 (b, h, k) |
|
16,905,669 |
|
16,905,669 |
|
17,622,478 |
| |||
|
Quantum Plastics, LLC |
|
Manufacturer of Plastic Parts |
|
Senior Subordinated Debt 12.0000% Cash, 03/10/2021 (k) |
|
10,000,000 |
|
9,644,095 |
|
10,000,000 |
| |||
|
|
|
|
|
Warrants (d) |
|
1 |
|
392,792 |
|
1,421,347 |
| |||
|
|
|
|
|
|
|
|
|
10,036,887 |
|
11,421,347 |
| |||
|
Turf Products, LLC |
|
Distributor - Landscaping and Irrigation Equipment |
|
Senior Subordinated Debt 10.0000% Cash, 08/07/2020 (k) |
|
7,717,056 |
|
7,717,056 |
|
7,491,956 |
| |||
|
U.S. Gas & Electric, Inc. |
|
Energy Services |
|
Second Lien Loan, 9.5000% Cash, 07/05/2025 (l, k) |
|
40,526,745 |
|
40,526,745 |
|
40,526,745 |
| |||
|
U.S. Spray Drying Holding Company |
|
Specialty Chemicals |
|
Class B Common Stock (784 shares) (d) |
|
|
|
5,488,000 |
|
5,534,183 |
| |||
|
|
|
|
|
Secured Loan 12.0000% Cash, 04/30/2019 (k) |
|
1,500,000 |
|
1,500,000 |
|
1,500,000 |
| |||
|
|
|
|
|
|
|
|
|
6,988,000 |
|
7,034,183 |
| |||
|
United States Technologies, Inc. |
|
Electronics Manufacturing and Repair |
|
Senior Lien Loan 10.5000% Cash, 07/17/2020 (k) |
|
5,500,000 |
|
5,491,818 |
|
5,555,000 |
| |||
|
Vestal Manufacturing Enterprises, Inc. |
|
Iron Foundries |
|
Second Lien Loan 12.0000% Cash, 08/21/2022 (k) |
|
2,450,000 |
|
2,450,000 |
|
2,450,000 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Sub Total Non-control/Non-affiliated investments |
|
|
|
177,520,484 |
|
153,428,098 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Affiliate investments - 29.81% (c, f, g) |
|
|
|
|
|
|
| |||||||
|
Advantage Insurance, Inc. |
|
Insurance |
|
Preferred Stock (750,000 shares) (a, d, e) |
|
|
|
7,500,000 |
|
8,798,281 |
| |||
|
Centile Holdings B.V. |
|
Software |
|
Common Equity Interest (a, d, e) |
|
|
|
3,524,376 |
|
6,484,000 |
| |||
|
Crius Energy Trust |
|
Energy Services |
|
Equity Unit (3,282,982 shares) (e) |
|
|
|
24,571,966 |
|
24,376,199 |
| |||
|
JSC Tekers Holdings |
|
Real Estate Management |
|
Common Stock (3,201 shares) (a, d, e) |
|
|
|
4,500 |
|
— |
| |||
|
|
|
|
|
Preferred Stock (9,159,085 shares) (a, d, e) |
|
|
|
11,810,188 |
|
4,177,000 |
| |||
|
|
|
|
|
|
|
|
|
11,814,688 |
|
4,177,000 |
| |||
|
MVC Environmental, Inc. |
|
Environmental Services |
|
Senior Secured Loan 9.0000% PIK, 12/22/2020 (a, b, h, k) |
|
6,869,353 |
|
6,869,353 |
|
5,799,413 |
| |||
|
|
|
|
|
Common Stock (980 shares) (a, d) |
|
|
|
3,140,375 |
|
— |
| |||
|
|
|
|
|
|
|
|
|
10,009,728 |
|
5,799,413 |
| |||
|
Security Holdings B.V. |
|
Electrical Engineering |
|
Common Equity Interest (a, d, e) |
|
|
|
51,204,270 |
|
35,388,000 |
| |||
|
|
|
|
|
Bridge Loan 5.0000% PIK, 12/31/2019 (a, b, e, k) |
|
4,090,057 |
|
4,090,057 |
|
4,090,057 |
| |||
|
|
|
|
|
|
|
|
|
55,294,327 |
|
39,478,057 |
| |||
|
SGDA Europe B.V. |
|
Environmental Services |
|
Common Equity Interest (a, d, e) |
|
|
|
28,544,800 |
|
826,000 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Sub Total Affiliate investments |
|
|
|
|
|
|
|
141,259,885 |
|
89,938,950 |
| |||
The accompanying notes are an integral part of these consolidated financial statements.
MVC Capital, Inc.
Consolidated Schedule of Investments - (Continued)
July 31, 2017
(Unaudited)
|
Company |
|
Industry |
|
Investment |
|
Principal |
|
Cost |
|
Fair Value/Market Value |
| |||
|
Control investments - 19.77% (c, f, g) |
|
|
|
|
|
|
|
|
|
|
| |||
|
Equus Total Return, Inc. |
|
Registered Investment Company |
|
Common Stock (4,444,644 shares) (d, k) |
|
|
|
$ |
10,030,272 |
|
$ |
10,489,360 |
| |
|
MVC Automotive Group GmbH |
|
Automotive Dealerships |
|
Common Equity Interest (a, d, e) |
|
|
|
51,185,015 |
|
16,242,000 |
| |||
|
|
|
|
|
Bridge Loan 6.0000% Cash, 06/30/2018 (a, e, k) |
|
$ |
4,855,166 |
|
4,855,166 |
|
4,855,166 |
| ||
|
|
|
|
|
|
|
|
|
56,040,181 |
|
21,097,166 |
| |||
|
MVC Private Equity Fund LP |
|
Private Equity |
|
Limited Partnership Interest (a, d, j, k) |
|
|
|
11,452,452 |
|
17,536,094 |
| |||
|
|
|
|
|
General Partnership Interest (a, d, j, k) |
|
|
|
292,154 |
|
441,185 |
| |||
|
|
|
|
|
|
|
|
|
11,744,606 |
|
17,977,279 |
| |||
|
RuMe Inc. |
|
Consumer Products |
|
Common Stock (5,297,548 shares) (a, d) |
|
|
|
924,475 |
|
490,590 |
| |||
|
|
|
|
|
Series C Preferred Stock (23,896,634 shares) (a, d) |
|
|
|
3,410,694 |
|
5,614,482 |
| |||
|
|
|
|
|
Series B-1 Preferred Stock (4,999,076 shares) (a, d) |
|
|
|
999,815 |
|
2,060,272 |
| |||
|
|
|
|
|
Subordinated Debt 10.0000% PIK, 10/07/2017 (a, b, k) |
|
967,454 |
|
957,777 |
|
957,777 |
| |||
|
|
|
|
|
Warrants (a, d) |
|
1 |
|
336,393 |
|
982,321 |
| |||
|
|
|
|
|
|
|
|
|
6,629,154 |
|
10,105,442 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Sub Total Control investments |
|
|
|
|
|
|
|
84,444,213 |
|
59,669,247 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
TOTAL PORTFOLIO INVESTMENTS - 100.42% (f) |
|
|
|
|
|
|
|
$ |
403,224,582 |
|
$ |
303,036,295 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Cash equivalents and restricted cash equivalents - 0.25% (f, g) |
|
|
|
|
|
|
|
|
|
|
| |||
|
Fidelity Institutional Government Money Market Fund |
|
Money Market Fund |
|
Beneficial Shares (772,055 shares) |
|
|
|
$ |
772,055 |
|
$ |
772,055 |
| |
|
Total Cash equivalents and restricted cash equivalents |
|
|
|
|
|
|
|
772,055 |
|
772,055 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
TOTAL INVESTMENT ASSETS - 100.67% |
|
|
|
|
|
|
|
$ |
403,996,637 |
|
$ |
303,808,350 |
| |
(a) These securities are restricted from public sale without prior registration under the Securities Act of 1933. The Company negotiates certain aspects of the method and timing of the disposition of these investments, including registration
rights and related costs.
(b) These securities accrue a portion of their interest/dividends in “payment in kind” interest/dividends which is capitalized to the investment.
(c) All of the Company’s equity and debt investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940, except MVC Automotive Group GmbH, Security Holdings B.V., SGDA Europe B.V., JSC Tekers Holdings, Centile Holdings B.V., Equus Total Return Inc., MVC Private Equity Fund L.P. and Advantage Insurance LTD. The Company makes available significant managerial assistance to all of the portfolio companies in which it has invested.
(d) Non-income producing assets.
(e) The principal operations of these portfolio companies are located in Europe, Canada, and Puerto Rico which represents approximately 25% of the total assets. The remaining portfolio companies are located in United States which represents approximately 46% of the total assets.
(f) Percentages are based on net assets of $301,774,214 as of July 31, 2017.
(g) See Note 3 for further information regarding “Investment Classification.”
(h) All or a portion of the accrued interest on these securities have been reserved for.
(i) Legacy Investments.
(j) MVC Private Equity Fund, LP is a private equity fund focused on control equity investments in the lower middle market. The fund currently holds four investments, three located in the United States and one in Gibraltar, the investments are in the energy, services, contract manufacturing, and industrial sectors. The Company’s proportional share of Plymouth Rock Energy membership interest and loan, the Gibdock Limited equity interest and Focus Pointe preferred stock is $7,255,392, $4,247,217, $3,001,696, respectively.
(k) All or a portion of these securities may serve as collateral for the Santander Credit Facility.
(l) U.S. Gas & Electric, Inc. is an indirect subsidiary of Crius Energy Trust.
PIK - Payment-in-kind
- Denotes zero cost or fair value.
The accompanying notes are an integral part of these consolidated financial statements.
MVC Capital, Inc.
Consolidated Schedule of Investments
October 31, 2016
|
Company |
|
Industry |
|
Investment |
|
Principal/Shares |
|
Cost |
|
Fair Value/Market Value |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Non-control/Non-affiliated investments- 44.06% (a, c, f, g) |
|
|
|
|
|
|
|
|
| |||||
|
Actelis Networks, Inc. |
|
Technology Investment |
|
Common Stock (150,602 shares) (d, i) |
|
|
|
$ |
5,000,003 |
|
— |
| ||
|
Biogenic Reagents |
|
Renewable Energy |
|
Senior Note 12.0000% Cash, 4.0000% PIK, 07/21/2018 (b, h, l) |
|
$ |
5,574,648 |
|
5,574,648 |
|
$ |
5,191,932 |
| |
|
|
|
|
|
Senior Convertible Note 12.0000% Cash, 4.0000% PIK, 07/21/2018 (b, h, l) |
|
5,017,183 |
|
5,017,183 |
|
4,672,737 |
| |||
|
|
|
|
|
Senior Note 12.0000% Cash, 4.0000% PIK, 06/30/2016 (b, h, l) |
|
4,250,291 |
|
4,250,291 |
|
4,250,291 |
| |||
|
|
|
|
|
Senior Subordinated Debt 12.0000% Cash, 4.0000% PIK, 06/30/2016 (b, h, l) |
|
1,030,188 |
|
1,030,188 |
|
1,030,188 |
| |||
|
|
|
|
|
Warrants (d) |
|
2 |
|
620,077 |
|
— |
| |||
|
|
|
|
|
|
|
|
|
16,492,387 |
|
15,145,148 |
| |||
|
Biovation Acquisition Co. |
|
Manufacturer of Laminate Material and Composites |
|
Common Stock (90 shares) (d) |
|
|
|
784,622 |
|
55,351 |
| |||
|
|
|
|
|
Senior Lien Loan 5.0000% PIK, 05/05/2021 (b, l) |
|
30,000 |
|
30,000 |
|
30,000 |
| |||
|
|
|
|
|
|
|
|
|
814,622 |
|
85,351 |
| |||
|
Custom Alloy Corporation |
|
Manufacturer of Pipe Fittings and Forgings |
|
Second Lien Loan 4.5000% Cash, 5.5000% PIK, 04/30/2020 (b, h, l) |
|
24,425,293 |
|
24,425,293 |
|
18,615,650 |
| |||
|
|
|
|
|
Unsecured Subordinated Loan 12.0000% Cash, 03/31/2018 (l) |
|
3,000,000 |
|
3,000,000 |
|
2,135,760 |
| |||
|
|
|
|
|
|
|
|
|
27,425,293 |
|
|||||