TriLinc Global Impact Fund LLC - FORM 10-Q

Attached files

file	filename
EX-32.1 - EX-32.1 - TriLinc Global Impact Fund LLC	trilinc-ex321_7.htm
EX-31.2 - EX-31.2 - TriLinc Global Impact Fund LLC	trilinc-ex312_6.htm
EX-31.1 - EX-31.1 - TriLinc Global Impact Fund LLC	trilinc-ex311_8.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2018

☐	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 000-55432

TriLinc Global Impact Fund, LLC

(Exact name of registrant as specified in its charter)

Delaware

36-4732802

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1230 Rosecrans Avenue, Suite 605,

Manhattan Beach, CA 90266

(Address of principal executive offices)

(310) 997-0580

(Registrant’s telephone number, including area code)

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

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐ (Do not check if a smaller reporting company)	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 ☒

As of May 10, 2018, the Company had outstanding 18,228,394 Class A units, 8,451,034 Class C units, 10,593,341 Class I units, 24,555 Class W units, 1,116,053 Class Y units, and 5,965,037 Class Z units.

Table of Contents

Part I. Financial Information		1

Item 1. Consolidated Financial Statements		1

Consolidated Statements of Assets and Liabilities as of March 31, 2018 (unaudited) and December 31, 2017		1

Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 (unaudited)		2

Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2018 and 2017 (unaudited)		3

Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 (unaudited)		4

Consolidated Schedules of Investments as of March 31, 2018 (unaudited) and December 31, 2017		5-8

Notes to Consolidated Financial Statements (unaudited)		9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		31

Item 3. Quantitative and Qualitative Disclosures About Market Risk		49

Item 4. Controls and Procedures		49

Part II. Other Information		50

Item 1. Legal Proceedings		50

Item 1A. Risk Factors		50

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		50

Item 3. Defaults Upon Senior Securities		51

Item 4. Mine Safety Disclosures		51

Item 5. Other Information		51

Item 6. Exhibits		51

Part I. Financial Information

Item 1. Consolidated Financial Statements.

TriLinc Global Impact Fund, LLC

Consolidated Statements of Assets and Liabilities

	As of
	March 31,			December 31,
	2018			2017
	(Unaudited)
ASSETS
Investments owned, at fair value (amortized cost of $386,243,553 and $335,328,569, respectively)	$	385,375,392		$	335,269,492
Cash		8,985,543			9,641,457
Interest receivable		10,538,698			9,210,430
Due from affiliates (see Note 5)		3,758,946			3,997,314
Other assets		174,837			189,103
Total assets		408,833,416			358,307,796

LIABILITIES
Due to unitholders		1,452,939			1,295,293
Management fee payable		2,012,618			1,763,018
Incentive fee payable		1,417,435			1,323,929
Notes payable		28,060,000			28,160,000
Unit repurchases payable		3,338,976			2,153,077
Accrued distribution and other fees		1,677,000			1,895,000
Other payables		427,634			360,742
Total liabilities		38,386,602			36,951,059
Commitments and Contingencies (see Note 5)
NET ASSETS	$	370,446,814		$	321,356,737

ANALYSIS OF NET ASSETS:
Net capital paid in on Class A units	$	160,691,952		$	166,754,603
Net capital paid in on Class C units		74,442,541			76,275,220
Net capital paid in on Class I units		92,965,263			92,778,756
Net capital paid in on Class W units		206,305			—
Net capital paid in on Class Y units		9,325,019			2,704,659
Net capital paid in on Class Z units		50,000,000			—
Offering costs		(17,184,266	)		(17,156,501	)
Net assets (equivalent to $8.421 and $8.466, respectively per unit based on total units outstanding of 44,187,642 and 38,183,103, respectively)	$	370,446,814		$	321,356,737
Net assets, Class A (units outstanding of 18,183,880 and 18,240,073, respectively)	$	152,535,450		$	158,558,939
Net assets, Class C (units outstanding of 8,426,681 and 8,411,343, respectively)		70,662,696			72,495,821
Net assets, Class I (units outstanding of 10,558,960 and 10,442,009, respectively)		88,228,971			88,086,934
Net assets, Class W (units outstanding of 24,555 and 0, respectively)		195,291			—
Net assets, Class Y (units outstanding of 1,116,053 and 1,089,678, respectively)		8,824,406			2,215,043
Net assets, Class Z (units outstanding of 5,877,513 and 0, respectively)		50,000,000			—
NET ASSETS	$	370,446,814		$	321,356,737

See accompanying notes to the consolidated financial statements.

TriLinc Global Impact Fund, LLC

Consolidated Statements of Operations

(Unaudited)

	Three months ended
	March 31,			March 31,
	2018			2017
INVESTMENT INCOME
Interest income	$	10,127,186		$	6,590,163
Interest from cash		54,548			87,922
Total investment income		10,181,734			6,678,085
EXPENSES
Management fees		2,009,600			1,520,974
Incentive fees		1,403,506			960,348
Professional fees		326,435			365,179
General and administrative expenses		325,172			280,555
Interest expense		448,620			19,742
Board of managers fees		54,375			54,375
Total expenses		4,567,708			3,201,173
Expense support payment from Sponsor		—			(1,324,828	)
Net expenses		4,567,708			1,876,345
NET INVESTMENT INCOME		5,614,026			4,801,740
Net change in unrealized depreciation on investments		(849,503	)		—
Foreign exchange gain		40,174			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	4,804,697		$	4,801,740

NET INVESTMENT INCOME PER UNITS - BASIC AND DILUTED	$	0.13		$	0.15
EARNINGS PER UNITS - BASIC AND DILUTED	$	0.11		$	0.15
WEIGHTED AVERAGE UNITS OUTSTANDING - BASIC AND DILUTED		42,272,734			31,423,215

See accompanying notes to the consolidated financial statements.

TriLinc Global Impact Fund, LLC

Consolidated Statements of Changes in Net Assets

(Unaudited)

	Three months ended
	March 31,			March 31,
	2018			2017
INCREASE FROM OPERATIONS
Net investment income	$	5,614,026		$	4,801,740
Foreign exchange gain		40,174			—
Net change in unrealized depreciation on investments		(849,503	)		—
Net increase from operations		4,804,697			4,801,740
DECREASE FROM DISTRIBUTIONS
Distributions to Class A unitholders		(3,093,859	)		(2,869,276	)
Distributions to Class C unitholders		(1,417,523	)		(1,285,860	)
Distributions to Class I unitholders		(1,782,002	)		(1,410,597	)
Distributions to Class W unitholders		(2,369	)		—
Distributions to Class Y unitholders		(186,809	)		—
Distributions to Class Z unitholders		(621,238	)		—
Net decrease from distributions		(7,103,800	)		(5,565,733	)
INCREASE FROM CAPITAL TRANSACTIONS
Issuance of Class A units		1,522,387			24,443,996
Issuance of Class C units		733,939			12,212,344
Issuance of Class I units		1,845,595			21,785,501
Issuance of Class W units		211,000			—
Issuance of Class Y units		225,000			—
Issuance of Class Z units		50,000,000			—
Repurchase of units		(3,338,976	)		(3,125,167	)
Class C units distribution fee		218,000			(233,000	)
Offering costs		(27,765	)		(2,401,853	)
Net increase from capital transactions		51,389,180			52,681,821
NET INCREASE IN NET ASSETS		49,090,077			51,917,828
Net assets at beginning of period		321,356,737			250,755,915
Net assets at end of period	$	370,446,814		$	302,673,743

See accompanying notes to the consolidated financial statements.

TriLinc Global Impact Fund, LLC

Consolidated Statements of Cash Flows

(Unaudited)

	Three months ended
	March 31,			March 31,
	2018			2017
Cash flows from operating activities
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	4,804,697		$	4,801,740
ADJUSTMENT TO RECONCILE NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS TO NET CASH USED IN OPERATING ACTIVITIES
Purchase of investments		(86,782,374	)		(74,703,583	)
Maturity of investments		37,045,877			60,583,156
Payment-in-kind interest		(848,622	)		—
Net change in unrealized depreciation on investments		849,503			—
Foreign exchange gains		(40,174	)		—
Accretion of discounts on investments		(330,109	)		(293,823	)
Increase in interest receivable		(1,328,268	)		(1,397,615	)
Decrease (increase) in due from affiliates		238,368			(111,819	)
Decrease in other expenses		14,266			5,955
Increase in due to unitholders		157,646			137,086
Increase in management and incentive fees payable		343,106			354,828
Increase in other payable		66,892			9,172
NET CASH USED IN OPERATING ACTIVITIES		(45,809,192	)		(10,614,903	)
Cash flows from financing activities
Net proceeds from issuance of units		51,835,396			48,836,929
Distributions paid to unitholders		(4,401,276	)		(3,060,697	)
Payments of offering costs		(27,765	)		(1,909,347	)
Repurchase of units		(2,153,077	)		(9,633,125	)
Repayments of notes payable		(100,000	)		—
Proceeds from issuance of notes payable		—			225,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		45,153,278			34,458,760
TOTAL INCREASE (DECREASE) IN CASH		(655,914	)		23,843,857
Cash at beginning of period		9,641,457			44,790,312
Cash at end of period	$	8,985,543		$	68,634,169
Supplemental information
Cash paid during the period for interest	$	367,868		$	16,228
Supplemental non-cash information
Issuance of units in connection with distribution reinvestment plan	$	2,702,524		$	2,505,036
Unit subscriptions receivable	$	-		$	14,574,746
Change in accrual of Class C unit distribution fee	$	(218,000	)	$	233,000

See accompanying notes to the consolidated financial statements.

TriLinc Global Impact Fund, LLC

Consolidated Schedule of Investments

As of March 31, 2018

(Unaudited)

Investment Type / Country	Portfolio Company	Sector	Description	Interest	Fees (2)			Maturity (3)	Principal Amount		Participation % (4)	Amortized Cost		Fair Value		% of Net Assets
Senior Secured Term Loan (1)
Brazil	Other Investments (5)	Programming and Data Processing	IT Service Provider	13.50%		2.0	%	10/21/2022	$	15,215,332	N/A	$	15,215,332	$	15,215,332		4.1	%
China	Other Investments (6)	Secondary Nonferrous Metals	Minor Metals Resource Trader	12.00%		0.0	%	6/22/2021		10,000,000	N/A		10,000,000		10,000,000		2.7	%
Colombia	Other Investments (5)	Personal Credit Institutions	Consumer Lender	11.25%		0.0	%	8/1/2021		4,081,077	N/A		4,081,077		4,081,077		1.1	%
Hong Kong	Other Investments (8)	Coal and Other Minerals and Ores	Resource Trader	11.50%		0.0	%	12/27/2020		15,000,000	N/A		15,000,000		15,000,000		4.0	%
Malaysia	Other Investments (8)	Chemicals and Allied Products	Wholesale Distributor	12.00%		0.0	%	3/31/2020		15,000,000	N/A		15,000,000		15,000,000		4.0	%
Mexico	Other Investments (9)	Refuse Systems	Waste to Fuels Processor	14.50%		0.0	%	7/27/2021		19,423,841	N/A		19,423,841		19,423,841		5.2	%
New Zealand	Other Investments (10)	Logging	Sustainable Timber Exporter	11.50%		0.0	%	2/10/2021		6,840,000	N/A		6,840,000		6,840,000		1.8	%
Peru	Pure Biofuels del Peru S.A.C. (11)	Bulk Fuel Stations and Terminals	Clean Diesel Distributor	11.50%		0.0	%	7/27/2019		15,000,000	N/A		16,831,593		16,831,593		4.5	%
Total Senior Secured Term Loan (1)													102,391,843		102,391,843		27.4	%
Senior Secured Term Loan Participations (1)
Botswana	Other Investments (7)	Short-Term Business Credit	SME Financier	12.04%		0.0	%	8/18/2021		4,740,000	100%		4,740,000		4,740,000		1.3	%
Brazil	Usivale Industria E Commercio (12), (19)	Agricultural Products	Sugar Producer	12.43%		0.0	%	12/15/2020		2,851,296	100%		2,851,296		2,851,296		0.8	%
Cabo Verde	TRG Cape Verde Holdings Limited (6)	Hotels and Motels	Hospitality Service Provider	13.50%		0.0	%	8/21/2021		15,949,324	26%		15,949,324		15,949,324		4.3	%
Croatia	Other Investments (8), (22)	Department Stores	Mall Operator	13.00%		0.0	%	1/23/2021		7,602,456	100%		7,602,456		7,640,880		2.1	%
Ghana	Other Investments (6)	Petroleum and Petroleum Products	Tank Farm Operator	12.00%		0.0	%	8/10/2021		15,500,000	100%		15,500,000		15,500,000		4.2	%
Ghana	Genser Energy Ghana Ltd. (13)	Electric Services	Power Producer	11.66%		0.0	%	8/31/2021		18,527,237	15%		18,527,237		18,527,237		5.0	%
Indonesia	Other Investments (6)	Street Construction	Infrastructure and Logistics Provider	20.00%		0.0	%	11/22/2019		10,909,500	75%		10,867,898		10,867,898		2.9	%
Indonesia	Other Investments (8)	Metals & Mining	Vessel Operator	11.00%		0.0	%	6/8/2020		3,332,336	100%		3,332,336		3,332,336		0.9	%
Jersey	Other Investments (8)	Telephone Communications	Mobile Network Operator	12.35%		3.0	%	3/28/2023		19,000,000	100%		18,430,000		18,430,000		5.0	%
Kenya	Other Investments (6)	Freight Transportation Arrangement	Freight and Cargo Transporter	13.57%		0.0	%	3/31/2023		12,588,963	49%		12,588,963		12,588,963		3.4	%
Namibia	Trustco Group Limited (14)	Land Subdividers and Developers	Property Developer	12.50%		0.0	%	8/15/2021		15,688,098	100%		15,578,276		15,578,276		4.2	%
Nigeria	Other Investments (15)	Water Transportation	Marine Logistics Provider	16.84%		0.8	%	9/16/2020		13,029,470	100%		12,980,304		12,980,304		3.5	%
Peru	Corporacion Prodesa S.R.L. (16)	Consumer Products	Diaper Manufacturer	12.00% - 13.00%		0.0	%	7/28/2021		4,960,000	100%		4,960,000		4,960,000		1.3	%
Uganda	Other Investments (7)	Farm Products	Grain Processor	12.00%		0.0	%	12/31/2020		3,650,000	100%		3,650,000		3,650,000		1.0	%
Zambia	Other Investments (6)	Soap, Detergents, and Cleaning	FMCG Manufacturer	11.00%		0.0	%	11/16/2019		1,195,188	15%		1,195,188		1,195,188		0.3	%
Total Senior Secured Term Loan Participations													148,753,278		148,791,702		40.2	%
Senior Secured Trade Finance Participations (1)
Argentina	Other Investments (7), (17)	Agricultural Products	Agriculture Distributor	9.00%		0.0	%	6/30/2018		12,500,000	83%		12,500,000		12,500,000		3.4	%
Argentina	Other Investments (7), (19)	Consumer Products	Dairy Co-Operative	10.67%		0.0	%	7/29/2018		6,000,000	17%		6,000,000		5,790,732		1.6	%
Argentina	Other Investments (19), (20)	Meat, Poultry & Fish	Beef Exporter	11.50%		0.0	%	8/31/2017		9,000,000	32%		9,000,000		8,425,571		2.3	%
Argentina	Other Investments (8), (19)	Fats and Oils	Oilseed Distributor	8.75% - 9.00%		0.0	%	2/22/2018		12,000,000	100%		12,000,000		12,000,000		3.2	%
Cameroon	Other Investments (9)	Chocolate and Cocoa Products	Cocoa & Coffee Exporter	17.50%		0.0	%	10/13/2018 - 10/29/2018		10,592,240	100%		10,592,240		10,592,240		2.9	%
Chile	Other Investments (18), (19)	Farm Products	Chia Seed Exporter	10.90%		0.0	%	3/4/2018		1,326,687	100%		1,326,687		1,326,687		0.4	%
Ecuador	Other Investments (7)	Fresh or Frozen Packaged Fish	Shrimp Exporter	9.25%		0.0	%	7/24/2018		1,503,141	16%		1,503,141		1,503,141		0.4	%
Ecuador	Other Investments (7)	Commercial Fishing	Fish Processor & Exporter	9.00%		0.0	%	8/18/2018		322,300	36%		322,300		322,300		0.1	%
Ecuador	Other Investments (7)	Commercial Fishing	Tuna Processor	9.50%		0.0	%	5/9/2018		588,844	10%		588,844		588,844		0.2	%
Guatemala	Other Investments (19), (20)	Farm Products	Sesame Seed Exporter	12.00%		0.0	%	3/31/2016		881,800	24%		881,800		881,800		0.2	%
Hong Kong	Other Investments (8)	Telephone and Telegraph Apparatus	Mobile Phone Distributor	10.00%		0.0	%	4/3/2018 - 5/23/2018		15,431,910	100%		15,431,910		15,431,910		4.2	%
Hong Kong	Other Investments (9)	Coal and Other Minerals and Ores	Non-Ferrous Metal Trader	9.50%		0.0	%	7/5/2018 - 8/18/2018		15,000,000	100%		15,000,000		15,000,000		4.0	%
Mauritius	Other Investments (9)	Groceries and Related Products	Vanilla Exporter	11.82%		0.0	%	11/8/2018		3,500,000	18%		3,500,000		3,500,000		0.9	%

Investment Type / Country	Portfolio Company	Sector	Description	Interest	Fees (2)			Maturity (3)	Principal Amount		Participation % (4)	Amortized Cost		Fair Value		% of Net Assets
Morocco	Other Investments (19), (20)	Secondary Nonferrous Metals	Scrap Metal Recycler	11.00%		0.0	%	7/31/2018		7,349,626	73%		7,349,626		7,349,626		2.0	%
Nigeria	Other Investments (9)	Farm Products	Cocoa Exporter	17.50%		0.0	%	9/7/2018 - 10/20/2018		4,515,692	100%		4,515,692		4,515,692		1.2	%
Nigeria	Other Investments (9)	Farm Products	Cocoa Distribution	17.50%		0.0	%	8/18/2018 - 9/19/2018		2,709,720	100%		2,709,720		2,709,720		0.7	%
Nigeria	Other Investments (9)	Farm Products	Cocoa Producer	17.50%		0.0	%	9/19/2018 - 10/22/2018		3,536,089	100%		3,536,089		3,536,089		1.0	%
Nigeria	Other Investments (9)	Farm Products	Cocoa Trader	17.50%		0.0	%	9/27/2018 - 10/7/2018		3,421,291	100%		3,421,291		3,421,291		0.9	%
South Africa	Other Investments (19), (20)	Food Products	Fruit & Nut Distributor	12.00%		0.0	%	5/22/2015		785,806	12%		785,806		726,729		0.2	%
United Arab Emirates	Other Investments (7)	Drugs, Proprietaries, and Sundries	Pharmaceuticals Distributor	14.60%		0.0	%	1/30/2018		888,192	60%		888,192		888,192		0.2	%
United Kingdom	Other Investments (9)	Coal and Other Minerals and Ores	Metals Trader	9.68% - 11.56%		0.0	%	5/7/2018 - 8//292018		5,358,626	85%		5,358,626		5,358,626		1.4	%
Total Senior Secured Trade Finance Participations													117,211,964		116,369,190		31.4	%
Short Term Investments (1)
Cayman Islands	Other Investments (21)	Financial Services	Financial Services Provider	7.50%		0.0	%	2/28/2018		10,000,000	N/A		10,000,000		10,000,000		2.7	%
United Kingdom	Other Investments (9)	Petroleum and Petroleum Products	Energy Commodity Trading	8.88%		0.0	%	1/31/2018		7,500,000	8%		7,500,000		7,500,000		2.0	%
Total Short Term Investments													17,500,000		17,500,000
Other investments
Croatia	Other investment (23)	Other	Foreign currency put option	N/A	N/A			1/23/2021	N/A		N/A		386,468		322,657		0	%

Total Investments												$	386,243,553	$	385,375,392

See accompanying notes to the consolidated financial statements.

¹	Refer to Note 3 and 4 of the consolidated financial statements for additional information on the Company’s investments.

²	Fees may include upfront, origination, commitment, facility and/or other fees that the borrower must contractually pay to the Company. Fees, if any, are typically received in connection with term loan transactions and are rarely applicable to trade finance transactions.

Trade finance borrowers may be granted flexibility with respect to repayment relative to the stated maturity date to accommodate specific contracts and/or business cycle characteristics. This flexibility in each case is agreed upon between the Company and the sub-advisor and between the sub-advisor and the borrower.

⁴	Percentage of the Company’s participation in total borrowings outstanding under sub-advisor provided financing facility.

⁵	Principal and interest paid monthly.

⁶	Principal and interest paid quarterly.

⁷	Monthly interest only payment. Principal due at maturity.

⁸	Quarterly interest only payment. Principal due at maturity.

⁹	Principal and interest paid at maturity.

₁₀	One third of the principal and accrued interest to be paid on the 18^th, 30^th, and 42^nd months after original drawdown date of 8/10/2017.

₁₁	This loan was issued at a discount. The entire principal, amounting to $18,462,024, is due at maturity. Interest is paid quarterly.

₁₂	Principal and interest paid annually. While the original maturity date was 5/15/2017, the maturity date was extended to 12/15/2020 in connection with a restructure of the loan. Refer to Note 3 for additional information.

₁₃

While the original maturity dates ranged from 3/10/2017 to 10/9/2017, during July 2017 the maturity dates were extended to 2/21/2018 to 6/1/2018. In October, this investment was refinanced from a trade finance to a term loan and the maturity dates was extended to 8/31/2021. In addition, at the time of the refinance, $2,027,327 of accrued interest was capitalized and added to the principal balance.

₁₄	Quarterly payments of principal and interest in the amount of $2,143,500 are due starting on 2/15/2020.

₁₅	Interest accrues at a variable rate of one-month Libor + 10.5%, which is paid currently, and also includes 4.68% of deferred interest due at maturity.

₁₆	In connection with a restructure of the underlying facilities, all maturity dates were extended to 7/28/21. Please refer to Note 3 for additional information.

₁₇	While the original maturity date was 7/18/2017, the maturity date was extended to 6/30/2018 to account for the delays in shipments.

₁₈	While the original maturity date was 12/11/2016, the maturity date was extended to 3/04/2018.

₁₉	Watch List investment. Refer to Note 3 for additional information.

₂₀	Investment on non-accrual status.

₂₁ Secured short term note receivable from Barak Mikopo Leveraged Structured Credit Fund SP, which is managed by Barak Fund Management Ltd., a sub-advisor to the Company. Principal and accrued interest are due at maturity.

²²	Investment is denominated in euro currency with a principal amount of 6,200,000 euro. Fair value represents the principal amount converted to US dollars at the current exchange rate.

²³	Foreign currency option contract to hedge the future principal repayment of investment denominated in euro.

TriLinc Global Impact Fund, LLC

Consolidated Schedule of Investments

December 31, 2017

Investment Type / Country	Portfolio Company	Sector	Description	Interest	Fees (2)			Maturity (3)	Principal Amount		Participation % (4)	Amortized Cost		Fair Value		% of Net Assets
Senior Secured Term Loan (1)
Brazil	Other Investments (5)	Programming and Data Processing	IT Service Provider	13.50%		2.0	%	10/21/2022	$	15,739,999	N/A	$	15,714,764	$	15,714,764		4.9	%
China	Other Investments (6)	Secondary Nonferrous Metals	Minor Metals Resource Trader	12.00%		0.0	%	6/22/2021		10,000,000	N/A		10,000,000		10,000,000		3.1	%
Colombia	Other Investments (5)	Personal Credit Institutions	Consumer Lender	11.25%		0.0	%	8/1/2021		3,157,735	N/A		3,157,735		3,157,735		1.0	%
Malaysia	Other Investments (8)	Chemicals and Allied Products	Wholesale Distributor	12.00%		0.0	%	3/31/2020		15,000,000	N/A		15,000,000		15,000,000		4.7	%
Mexico	Other Investments (9)	Refuse Systems	Waste to Fuels Processor	14.50%		0.0	%	7/27/2021		11,315,000	N/A		11,315,000		11,315,000		3.5	%
New Zealand	Other Investments (10)	Logging	Sustainable Timber Exporter	11.50%		0.0	%	2/10/2021 - 4/2/2021		6,840,000	N/A		6,840,000		6,840,000		2.1	%
Peru	Pure Biofuels del Peru S.A.C. (11)	Bulk Fuel Stations and Terminals	Clean Diesel Distributor	11.33%		0.0	%	7/27/2019		15,000,000	N/A		16,545,994		16,545,994		5.1	%
Total Senior Secured Term Loan (1)													78,573,493		78,573,493		24.4	%
Senior Secured Term Loan Participations (1)
Botswana	Other Investments (7)	Short-Term Business Credit	SME Financier	12.04%		0.0	%	8/18/2021		4,740,000	100%		4,740,000		4,740,000		1.5	%
Brazil	Usivale Industria E Commercio (12), (19)	Agricultural Products	Sugar Producer	12.43%		0.0	%	12/15/2020		2,851,296	100%		2,851,296		2,851,296		0.9	%
Cabo Verde	TRG Cape Verde Holdings Limited (6)	Hotels and Motels	Hospitality Service Provider	13.50%		0.0	%	8/21/2021		15,807,931	26%		15,807,931		15,807,931		4.9	%
Ghana	Other Investments (6)	Petroleum and Petroleum Products	Tank Farm Operator	12.00%		0.0	%	8/10/2021		15,500,000	100%		15,500,000		15,500,000		4.8	%
Ghana	Genser Energy Ghana Ltd. (13)	Electric Services	Power Producer	11.66%		0.0	%	8/31/2021		18,527,237	15%		18,527,237		18,527,237		5.8	%
Indonesia	Other Investments (6)	Street Construction	Infrastructure and Logistics Provider	20.00%		0.0	%	11/22/2019		10,909,500	75%		10,861,658		10,861,658		3.4	%
Indonesia	Other Investments (8)	Metals & Mining	Vessel Operator	11.00%		0.0	%	6/8/2020		3,332,336	62%		3,332,336		3,332,336		1.0	%
Kenya	Other Investments (6)	Freight Transportation Arrangement	Freight and Cargo Transporter	12.82%		0.0	%	3/31/2023		12,464,320	59%		12,464,320		12,464,320		3.9	%
Namibia	Trustco Group Limited (14)	Land Subdividers and Developers	Property Developer	12.50%		0.0	%	8/15/2021		15,529,353	100%		15,411,497		15,411,497		4.8	%
Nigeria	Other Investments (15)	Water Transportation	Marine Logistics Provider	16.54%		0.8	%	9/16/2020		13,407,670	100%		13,353,503		13,353,503		4.2	%
Peru	Corporacion Prodesa S.R.L. (16)	Consumer Products	Diaper Manufacturer	12.00% - 13.00%		0.0	%	7/28/2021		4,960,000	100%		4,960,000		4,960,000		1.5	%
Zambia	Other Investments (6)	Soap, Detergents, and Cleaning	FMCG Manufacturer	11.00%		0.0	%	11/16/2019		1,355,600	15%		1,355,600		1,355,600		0.4	%
Total Senior Secured Term Loan Participations													119,165,378		119,165,378		37.1	%
Senior Secured Trade Finance Participations (1)
Argentina	Other Investments (7), (17)	Agricultural Products	Agriculture Distributor	9.00%		0.0	%	5/1/2018		12,500,000	83%		12,500,000		12,500,000		3.9	%
Argentina	Other Investments (7), (19)	Consumer Products	Dairy Co-Operative	10.67%		0.0	%	7/29/2018		6,000,000	17%		6,000,000		6,000,000		1.9	%
Argentina	Other Investments (8), (19)	Meat, Poultry & Fish	Beef Exporter	11.50%		0.0	%	8/31/2017		9,000,000	32%		9,000,000		9,000,000		2.8	%
Argentina	Other Investments (8), (19)	Fats and Oils	Oilseed Distributor	8.75% - 9.00%		0.0	%	2/22/2018		12,000,000	100%		12,000,000		12,000,000		3.7	%
Chile	Other Investments (18), (19)	Farm Products	Chia Seed Exporter	10.90%		0.0	%	3/4/2018		1,326,687	100%		1,326,687		1,326,687		0.4	%
Ecuador	Other Investments (7)	Fresh or Frozen Packaged Fish	Shrimp Exporter	9.25%		0.0	%	9/4/2018 - 10/22/2018		3,338,520	34%		3,338,520		3,338,520		1.0	%
Ecuador	Other Investments (7)	Commercial Fishing	Fish Processor & Exporter	9.00%		0.0	%	8/18/2018		351,559	43%		351,559		351,559		0.1	%
Guatemala	Other Investments (19), (20)	Farm Products	Sesame Seed Exporter	12.00%		0.0	%	3/31/2016		881,800	24%		881,800		881,800		0.3	%
Hong Kong	Other Investments (8)	Telephone and Telegraph Apparatus	Mobile Phone Distributor	10.00%		0.0	%	4/29/2018		14,388,525	100%		14,388,525		14,388,525		4.5	%
Hong Kong	Other Investments (9)	Coal and Other Minerals and Ores	Non-Ferrous Metal Trader	9.50%		0.0	%	1/4/2018 - 2/19/2018		15,000,000	100%		15,000,000		15,000,000		4.7	%
Hong Kong	Other Investments (8)	Coal and Other Minerals and Ores	Resource Trader	10.0% - 11.5%		0.0	%	11/16/2017 - 12/27/2020		11,957,864	100%		11,957,864		11,957,864		3.7	%
Mauritius	Other Investments (9)	Groceries and Related Products	Vanilla Exporter	11.82%		0.0	%	11/8/2018		3,500,000	27%		3,500,000		3,500,000		1.1	%
Morocco	Other Investments (19), (20)	Secondary Nonferrous Metals	Scrap Metal Recycler	11.00%		0.0	%	7/31/2018		7,349,626	73%		7,349,626		7,349,626		2.3	%
Nigeria	Other Investments (9)	Farm Products	Cocoa Exporter	17.50%		0.0	%	9/7/2018 - 9/29/2018		1,936,600	100%		1,936,600		1,936,600		0.6	%
Nigeria	Other Investments (9)	Farm Products	Cocoa Distribution	17.50%		0.0	%	9/19/2018		1,846,170	100%		1,846,170		1,846,170		0.6	%
Nigeria	Other Investments (9)	Farm Products	Cocoa Producer	17.50%		0.0	%	9/19/2018		764,280	100%		764,280		764,280		0.2	%
Nigeria	Other Investments (9)	Farm Products	Cocoa Trader	17.50%		0.0	%	9/19/2018 - 9/27/2018		1,205,450	100%		1,205,450		1,205,450		0.4	%

Investment Type / Country	Portfolio Company	Sector	Description	Interest	Fees (2)			Maturity (3)	Principal Amount		Participation % (4)	Amortized Cost		Fair Value		% of Net Assets
South Africa	Other Investments (19), (20)	Food Products	Fruit & Nut Distributor	12.00%		0.0	%	5/22/2015		785,806	12%		785,806		726,729		0.2	%
South Africa	Other Investments (8)	Metals & Mining	Mine Remediation Company	17.50%		0.0	%	9/28/2017		1,234,145	10%		1,234,145		1,234,145		0.4	%
United Arab Emirates	Other Investments (7)	Drugs, Proprietaries, and Sundries	Pharmaceuticals Distributor	14.60%		0.0	%	1/30/2018		1,080,000	60%		1,080,000		1,080,000		0.3	%
United Kingdom	Other Investments (9)	Coal and Other Minerals and Ores	Metals Trader	9.50% - 10.14%		0.0	%	12/31/2017 - 5/8/2018		4,296,451	71%		4,296,451		4,296,451		1.3	%
Uruguay	Other Investments (7)	Food Products	Citrus Producer	9.00%		0.0	%	2/3/2018 - 7/26/2018		346,215	100%		346,215		346,215		0.1	%
Total Senior Secured Trade Finance Participations													111,089,698		111,030,621		34.5	%
Short Term Investments (1)
Cayman Islands	Other Investments (21)	Financial Services	Financial Services Provider	7.50%		0.0	%	2/28/2018		10,000,000	N/A		10,000,000		10,000,000		3.1	%
United Kingdom	Other Investments (9)	Petroleum and Petroleum Products	Energy Commodity Trading	8.88% - 9.15%		0.0	%	1/31/2018 - 2/28/2018		16,500,000	16%		16,500,000		16,500,000		5.1	%
Total Short Term Investments													26,500,000		26,500,000		8.2	%

Total Investments												$	335,328,569	$	335,269,492

See accompanying notes to the consolidated financial statements.

¹	Refer to Note 3 and 4 of the consolidated financial statements for additional information on the Company’s investments.

²	Fees may include upfront, origination, commitment, facility and/or other fees that the borrower must contractually pay to the Company. Fees, if any, are typically received in connection with term loan transactions and are rarely applicable to trade finance transactions.

⁴	Percentage of the Company’s participation in total borrowings outstanding under sub-advisor provided financing facility.

⁵	Principal and interest paid monthly.

⁶	Principal and interest paid quarterly.

⁷	Monthly interest only payment. Principal due at maturity.

⁸	Quarterly interest only payment. Principal due at maturity.

⁹	Principal and interest paid at maturity.

₁₀	One third of the principal and accrued interest to be paid on the 18^th, 30^th, and 42^nd months after original drawdown date of 8/10/2017.

₁₁	This loan was issued at a discount. The entire principal, amounting to $18,462,024, is due at maturity. Interest is paid quarterly.

₁₂	Principal and interest paid annually. While the original maturity date was 5/15/2017, the maturity date was extended to 12/15/2020 in connection with a restructure of the loan. Refer to Note 3 for additional information.

₁₃

₁₄	Quarterly payments of principal and interest in the amount of $2,143,500 are due starting on 2/15/2020.

₁₅	Interest accrues at a variable rate of one-month Libor + 10.5%, which is paid currently, and also includes 4.68% of deferred interest due at maturity.

₁₆	In connection with a restructure of the underlying facilities, all maturity dates were extended to 7/28/21. Please refer to Note 3 for additional information.

₁₇	While the original maturity date was 7/18/2017, the maturity date was extended to 5/01/2018 to account for the delays in shipments.

₁₈	While the original maturity date was 12/11/2016, the maturity date was extended to 3/04/2018.

₁₉	Watch List investment. Refer to Note 3 for additional information.

₂₀	Investment on non-accrual status.

TRILINC GLOBAL IMPACT FUND, LLC

Notes to Consolidated Financial Statements

March 31, 2018

(Unaudited)

Note 1. Organization and Operations of the Company

TriLinc Global Impact Fund, LLC (the “Company”) was organized as a Delaware limited liability company on April 30, 2012 and formally commenced operations on June 11, 2013. The Company makes impact investments in Small and Medium Enterprises, known as SMEs, which the Company defines as those business having less than 500 employees, primarily in developing economies that provide the opportunity to achieve both competitive financial returns and positive measurable impact. The Company uses the proceeds raised from the issuance of units to invest in SMEs through local market sub-advisors in a diversified portfolio of financial assets, including direct loans, convertible debt instruments, trade finance, structured credit and preferred and common equity investments. To a lesser extent, the Company may also make impact investments in companies that may not meet our technical definition of SMEs due to a larger number of employees but that also provide the opportunity to achieve both competitive financial returns and positive measurable impact. The Company generally expects that such investments will have similar investment characteristics as SMEs as defined by the Company. The Company’s investment objectives are to generate current income, capital preservation and modest capital appreciation primarily through investments in SMEs. The Company is externally managed by TriLinc Advisors, LLC (the “Advisor”). The Advisor is an investment advisor registered with the Securities and Exchange Commission (“SEC”).

TriLinc Global, LLC (the “Sponsor”) owns 85% of the units of the Advisor, and is the sponsor of the Company. Strategic Capital Advisory Services, LLC (“SCAS”) owns 15% of the Advisor, and is considered an affiliate of the Company. The Sponsor employs staff who operate both the Advisor and the Company. The Sponsor, the Advisor and SCAS are Delaware limited liability companies.

In May 2012, the Advisor purchased 22,161 Class A units for aggregate gross proceeds of $200,000. The Company commenced its initial public offering of up to $1,500,000,000 in units of limited liability company interest (the “Offering”) on February 25, 2013. On June 11, 2013, the Company satisfied its minimum offering requirement of $2,000,000 when the Sponsor purchased 321,330 Class A units for aggregate gross proceeds of $2,900,000 and the Company commenced operations. The primary offering terminated on March 31, 2017. The Company continues to offer and sell units pursuant to its Distribution Reinvestment Plan (“DRP”). Through the termination of the primary offering, the Company raised approximately $361,776,000 in gross proceeds, including approximately $13,338,000 raised through the DRP. For the period from April 1, 2017 to March 31, 2018, the Company raised an additional $66,065,000 pursuant to a private placement and $11,465,000 pursuant to the DRP for the gross proceeds of $439,306,000 as of March 31, 2018.

Although the Company was organized and intends to conduct its business in a manner so that it is not required to register as an investment company under the Investment Company Act of 1940, as amended, the consolidated financial statements are prepared using the specialized accounting principles of the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies. Overall, the Company’s management believes the use of investment company accounting makes the Company’s financial statements more useful to investors and other financial statement users since it allows a more appropriate basis of comparison to other entities with similar objectives.

To assist the Company in achieving its investment objective, the Company makes investments via wholly owned subsidiaries (each a “Subsidiary” and collectively, the “Subsidiaries”), all of which are Cayman Islands exempted companies. In June 2016, the Company ~~created TriLinc Global Impact Fund Cayman, Ltd. (“TGIFC”) to allow the Company to use financial leverage.~~ The Company transferred all of the shares of all of its Subsidiaries to TGIFC. The Subsidiaries own all of the Company’s investments. As of March 31, 2018, the Company’s subsidiaries are as follows:

•

TriLinc Global Impact Fund – Asia, Ltd.

•

TriLinc Global Impact Fund – Latin America, Ltd.

•

TriLinc Global Impact Fund – Trade Finance, Ltd.

•

TriLinc Global Impact Fund – African Trade Finance, Ltd.

•

TriLinc Global Impact Fund – Africa, Ltd.

•

TriLinc Global Impact Fund – Latin America II, Ltd.

•

TriLinc Global Impact Fund – African Trade Finance II, Ltd.

•

TriLinc Global Impact Fund – Latin America III, Ltd.

•

TriLinc Global Impact Fund – Asia II, Ltd.

•

TriLinc Global Impact Fund – Asia III, Ltd.

•

TriLinc Global Impact Fund – African Trade Finance III, Ltd.

•

TriLinc Global Impact Fund – Europe, Ltd.

•

TriLinc Global Impact Fund – Cayman, Ltd.

Through March 31, 2018, the Company has made, through its Subsidiaries, loans in several countries located in South America, Asia, Africa, and Europe.

Note 2. Significant Accounting Policies

Basis of Presentation

The Company’s financial information is prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company follows the accounting and reporting guidance in the FASB ASC Topic 946 — Financial Services, Investment Companies (“ASC 946”). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These financial statements are presented in United States (“U.S.”) dollars, which is the functional and reporting currency of the Company and all its subsidiaries.

The interim consolidated financial statements and notes are presented as permitted by the requirements for Quarterly Reports on Form 10-Q. Certain financial information that is normally included in annual financial statements, including certain financial statement footnotes, prepared in accordance with GAAP is not required for interim reporting purposes and has been omitted herein. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the SEC on April 2, 2018.

The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results that ultimately may be achieved for the full year ending December 31, 2018.

The accompanying consolidated financial statements include the accounts of the Company and its Subsidiaries, which were established to hold certain investments of the Company. The Company owns 100% of each Subsidiary and, as such, the Subsidiaries are consolidated into the Company’s consolidated financial statements. Transactions between Subsidiaries, to the extent they occur, are eliminated in consolidation. The consolidated financial statements reflect all adjustments, consisting solely of normal recurring accruals, that, in the opinion of management, are necessary for the fair presentation of the results of the operations and financial condition as of and for the periods presented.

Cash

Cash consists of demand deposits at a financial institution located in the U.S. Such deposits may be in excess of the Federal Deposit Insurance Corporation insurance limits. The Company considers the credit risk of this financial institution to be remote and has not experienced and does not expect to experience any losses in any such accounts.

Revenue Recognition

The Company records interest income on an accrual basis to the extent that the Company expects to collect such amounts. The Company does not accrue as a receivable interest on loans for accounting purposes if there is reason to doubt the ability to collect such interest. Structuring, upfront and similar fees are recorded as a discount on investments purchased and are accreted into interest income, on a straight line basis, which the Company has determined not to be materially different from the effective yield method.

The Company records prepayment fees for loans and debt securities paid back to the Company prior to the maturity date as income upon receipt.

The Company generally places loans on non-accrual status when principal and interest are past due 90 days or more or when there is a reasonable doubt that principal or interest will be collected. If, however, management believes the principal and interest will be collected, a loan may be left on accrual status during the period the Company is pursuing repayment of the loan. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment of the financial condition of the borrower. Non-accrual loans are generally restored to accrual status when past due principal and interest is paid and, in the Company’s management’s judgment, is likely to remain current over the remainder of the term. At March 31, 2018, four portfolio companies were on non-accrual status with an aggregate fair value of $17,383,726 or 4.5% of the fair value of the Company’s total investments. At December 31, 2017, three portfolio companies were on non-accrual status with an aggregate fair value of $8,958,155 or 2.7% of the fair value of the Company’s

total investments. Interest income not recorded relative to the original terms of the loans to the four companies on non-accrual status as of March 31, 2018 amounted to approximately $522,471 for the three months ended March 31, 2018.

Valuation of Investments

The Company applies fair value accounting to all of its investments in accordance with ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. As defined in ASC 820, fair value is the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with ASC 820, the Company has categorized its investments into a three-level fair value hierarchy as discussed in Note 4.

ASC 820 establishes a hierarchal disclosure framework that prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Based on the observability of the inputs used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to the fair value hierarchy. The fair value hierarchy ranks the observability of the inputs used to determine fair values. Investments carried at fair value are classified and disclosed in one of the following three categories:

•

Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•

Level 2 — Valuations based on inputs other than quoted prices included in Level 1, which are either directly or indirectly observable.

•

Level 3 — Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or cost approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples. The information may also include pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. Certain investments may be valued based upon estimated value of underlying collateral and include adjustments deemed necessary for estimates of costs to obtain control and liquidate available collateral. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.

The inputs used in the determination of fair value may require significant judgment or estimation.

Investments for which market quotations are readily available are valued at those quotations. Most of the Company’s investments are loans to private companies, which are not actively traded in any market and for which quotations are not available. For those investments for which market quotations are not readily available, or when such market quotations are deemed by the Advisor not to represent fair value, the Company’s board of managers has approved a multi-step valuation process to be followed each fiscal quarter, as described below:

Each investment is valued by the Advisor in collaboration with the relevant sub-advisor;

For all investments with a stated maturity of greater than 12 months, the Company has engaged Duff & Phelps, LLC (“Duff & Phelps”) to conduct a review on the reasonableness of the Company’s internal estimates of fair value on each asset on a quarterly rotating basis, with each of such investments being reviewed at least annually, and provide an opinion that the Advisor’s estimate of fair value for each investment is reasonable;

The audit committee of the Company’s board of managers reviews and discusses the preliminary valuation prepared by the Advisor and any opinion rendered by Duff & Phelps; and

The board of managers discusses the valuations and determines the fair value of each investment in the Company’s portfolio in good faith based on the input of the Advisor, Duff & Phelps and the audit committee. The board of managers is ultimately responsible for the determination, in good faith, of the fair value of each investment.

Below is a description of factors that the Company’s board of managers may consider when valuing the Company’s investments.

Fixed income investments are typically valued utilizing a market approach, income approach, cost approach, or a combination of these approaches (and any others, as appropriate). The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including the sale of a business) and is used less frequently due to the private nature of the Company’s investments. The income approach uses valuation techniques to convert future amounts (for example, interest and principal payments) to a single present value amount (discounted) calculated based on an appropriate discount rate. The measurement is based on the net present value indicated by current market expectations about those future amounts. The cost approach is a valuation technique that uses the concept of replacement cost as an indicator of value. The premise of the cost approach holds that a prudent investor would pay no more for an asset than the amount for which the asset could be replaced. To clarify, the cost approach as a method for valuing an investment is to be distinguished from holding an investment at cost as of the initial investment date. In following a given approach, the types of factors that the Company may take into account in valuing the Company’s investments include, as applicable:

•

Macro-economic factors that are relevant to the investment or the underlying obligor

•

Industry factors that are relevant to the investment or the underlying obligor

•

Historical and projected financial performance of the obligor based on most recent financial statements

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Borrower draw requests and payment track record

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Loan covenants, duration and drivers

•

Performance and condition of the collateral (nature, type and value) that supports the investment

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Sub-Advisor recommendation as to possible impairment or reserve, including updates and feedback

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For participations, the Company’s ownership percentage of the overall facility

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Key inputs and assumptions that are believed to be most appropriate for the investment and the approach utilized

The Company may also look to private merger and acquisition statistics, public trading multiples discounted for illiquidity and other factors, valuations implied by third-party investments in the portfolio companies or industry practices in determining fair value. The Company may also consider the size and scope of a portfolio company and its specific strengths and weaknesses, as well as any other factors the Company deems relevant in measuring the fair values of the Company’s investments.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments

The Company measures net realized gains or losses by the difference between the net proceeds from the repayment or sale on investments and the amortized cost basis of the investment including unamortized upfront fees and prepayment penalties. Realized gains or losses on the disposition of an investment are calculated using the first in first out (FIFO) method, utilizing the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Payment-in-Kind Interest

The Company may have investments that contain a payment-in-kind, or PIK, interest provision. For loans with contractual PIK interest, any interest will be added to the principal balance of such investments and be recorded as income, if the valuation indicates that such interest is collectible.

Distribution and Ongoing Dealer Manager Fees

The Company pays a distribution fee equal to 0.8% per annum of the Company’s current estimated value per share for each Class C unit sold in the Offering or pursuant to a private placement. In addition, the Company pays an ongoing dealer manager fee for each Class I unit sold pursuant to a private placement. Further, the Company pays an ongoing dealer manager fee and service fee for each Class W unit sold pursuant to the private placement. The aggregate amount of underwriting compensation for each public and private offering of the Class A, Class C, Class I, Class W, Class Y and Class Z units, including any applicable distribution fees, ongoing dealer manager fees and service fees, cannot exceed the Financial Industry Regulatory Authority’s 10% cap on underwriting compensation. The distribution fees, ongoing dealer manager fees and service fees are not paid at the time of purchase. Such fees are payable monthly in arrears, as they become contractually due.

The Company accounts for the distribution fees as a charge to equity at the time each Class C unit was sold in the Offering and recorded a corresponding liability for the estimated amount to be paid in future periods. The Company accounts for the ongoing dealer manager fees and service fees paid in connection with the sale of Class I and Class W units in the private placement in the same manner. At March 31, 2018, the estimated unpaid aggregate distribution fee for Class C units amounted to $1,600,000, the unpaid

dealer manager fee for Class I units amounted to $73,000 and the unpaid dealer manager and service fees for Class W units amounted to $4,000.

Income Taxes

The Company is classified as a partnership for U.S. federal income tax purposes. As such, the Company allocates all income or loss to its unitholders according to their respective percentage of ownership, and is generally not subject to tax at the entity level. Therefore, no provision for federal or state income taxes has been included in these financial statements.

The Company may be subject to withholding taxes on income and capital gains imposed by certain countries in which the Company invests. The withholding tax on income is netted against the income accrued or received. Any reclaimable taxes are recorded as income. The withholding tax on realized or unrealized gain is recorded as a liability.

The Company follows the guidance for uncertainty in income taxes included in the ASC 740, Income Taxes. This guidance requires the Company to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including the resolution of any related appeals or litigation processes, based on the technical merits of the position.

As of March 31, 2018, no tax liability for uncertain tax provision had been recognized in the accompanying financial statements nor did the Company recognize any interest and penalties related to unrecognized tax benefits. The earliest year that the Company’s income tax returns are subject to examination is the period ending December 31, 2014.

Unitholders are individually responsible for reporting income or loss, to the extent required by the federal and state income tax laws and regulations, based upon their respective share of the Company’s income and expense as reported for income tax purposes.

Calculation of Net Asset Value

The Company’s net asset value is calculated on a quarterly basis. As of March 31, 2018, the Company has six classes of units: Class A units, Class C units, Class I units, Class W units, Class Y and Class Z units. All units participate in the income and expenses of the Company on a pro-rata basis based on the number of units outstanding. Under GAAP, pursuant to the SEC guidance, effective June 30, 2016, the Company records liabilities for ongoing fees that the Company (i) currently owes to the dealer manager under the terms of the dealer manager agreement and (ii) for an estimate that the Company may pay to the dealer manager in future periods. As of March 31, 2018, under GAAP, the Company recorded a liability in the amount of $1,677,000 for the estimated future amount of Class C unit distribution fee, Class I unit dealer manager fee, Class W unit ongoing dealer manager fee and Class W unit service fee payable. The Company is not required to determine its net asset value under GAAP and thus, the Company’s determination of net asset value per share for Class C units now varies from GAAP. In the prior periods, the Company deducted the liability for the estimated future distribution fees in the Company’s net asset value calculation for Class C units. As a result, for each period from June 30, 2016 through March 31, 2017, the Class A and Class I units had a higher net asset value per unit than Class C units with the difference being the result of the future distribution fee deduction for Class C units. The Company has determined that such approach is not the most appropriate for determining net asset value per share for Class C units and, beginning with the net asset value determination as of June 30, 2017, the Company does not deduct the liability for estimated future distribution fees in its calculation of net asset value per share for Class C units. Further, the Company does not deduct the liability for estimated future dealer manager fees in its calculation of the net asset value per unit for Class I units and Class W units. Likewise, the Company does not deduct the liability for estimated future service fees in its calculation of the net asset value per unit for Class W units. The Company believes this approach is consistent with the industry standard and is more appropriate since the Company intends for the net asset value to reflect the estimated value on the date that the Company determines its net asset value. Accordingly, the Company believes that its estimated net asset value at any given time should not include consideration of any estimated future ongoing dealer manager or service fees that may become payable after such date. As a result of this change in the calculation of the net asset value, as of March 31, 2018, each of the Class A, Class C, Class I, Class W, Class Y and Class Z units have the same net asset value per unit of $8.421. As of March 31, 2017, Class A and Class I units had a net asset value of $8.529 per unit and Class C units had a net asset value of $8.267 (with a blended net asset value of $8.467 per unit). The increase in the net asset value per Class C unit from $8.267 as of March 31, 2017 to $8.421 as of March 31, 2018 is solely as a result of the change in the treatment of future distribution fees in the net asset value calculation discussed above and is not reflective of any increase in the value of the Company’s assets. Without taking into account the change in the treatment of the future distribution fees, the net asset value per unit has decreased by $0.108 from $8.529 as of March 31, 2017 to $8.421 as of March 31, 2018 as a result of the Sponsor’s determination to absorb a reduced amount of operating expenses during the second and fourth quarters of 2017. In addition, the Company failed to realize sufficient investment income during the second and fourth quarters of 2017 and the first quarter of 2018, as a result of delays in finding suitable investments, to cover operating expenses.

Net Income (Loss) per Unit

Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members’ units outstanding during the period. Diluted net income or loss per unit is computed by dividing net income (loss) by the weighted average number of members’ units and members’ unit equivalents outstanding during the period. The Company did not have any potentially dilutive units outstanding at March 31, 2018 and 2017.

Organization and Offering Costs

The Sponsor has incurred organization and offering costs on behalf of the Company. Organization and offering costs are reimbursable to the Sponsor to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0% of the gross offering proceeds (the “O&O Reimbursement Limit”) raised from the Offering and will be accrued and payable by the Company only to the extent that such costs do not exceed the O&O Reimbursement Limit. Reimbursement of organization and offering costs that exceed the O&O Reimbursement Limit will be expensed in the period they become reimbursable, which is dependent on the gross offering proceeds raised in such period, and are therefore not included on the Statements of Assets and Liabilities as of March 31, 2018 and December 31, 2017. These expense reimbursements are subject to regulatory caps and approval by the Company’s board of managers. Reimbursements to the Sponsor are included as a reduction to net assets on the Consolidated Statement of Changes in Net Assets. Based on the proceeds raised in the Offering at the end of the primary offering, the organization and offering expenses equaled to 4.7% of the gross proceeds. As a result of the termination of the primary offering, effective March 31, 2017, the Company no longer pays the dealer manager selling commissions and dealer manager fees under a dealer manager agreement relating to the Offering. The Company will continue to incur certain organization and offering costs associated with the DRP and ongoing distribution fees on Class C units. In addition, the Sponsor has and may continue to incur organization and offering costs on behalf of the Company in connection with private placements of the Company’s units and the Company will pay selling commissions, dealer manager fees and ongoing distribution, dealer manager, and service fees to the dealer manager for certain sales pursuant to a private placement. As of March 31, 2018 the Sponsor has incurred $510,657 in organization and offering costs on behalf of the Company related to a private placement of the Company’s units. As of March 31, 2018, the Company has reimbursed $82,289 of the organization and offering incurred relating to such private placement and is under no obligation to reimburse the Sponsor for the remainder.

Operating Expense Responsibility Agreement

On March 26, 2018, the Company, Advisor and the Sponsor entered into an Amended and Restated Operating Expense Responsibility Agreement (“Responsibility Agreement”) originally effective as of June 11, 2013 and covering expenses through December 31, 2017. Pursuant to the terms of the Responsibility Agreement, the Sponsor has paid approximately $12,422,100 of operating expenses, management fees, and incentive fees on behalf of the Company and will pay or reimburse to the Company an additional $4,238,700 of expenses, which have been accrued by the Sponsor as of December 31, 2017. The Sponsor will only be entitled to reimbursement of the cumulative Company expenses to the extent the Company’s investment income in any quarter, as reflected on the statement of operations, exceeds the sum of (a) total distributions to unitholders incurred during the quarter and (b) the Company’s expenses as reflected on the statement of operations for the same quarter (the “Reimbursement Hurdle”). If the Sponsor is entitled to receive reimbursement for any given quarter because the Company’s investment income exceeds the Reimbursement Hurdle for such quarter, the Company will apply the excess amount (the “Excess Amount”) as follows: (i) first, the Company will reimburse the Sponsor for all expenses, other than management fees and incentive fees, that the Sponsor previously paid on the Company’s behalf, which will generally consist of operating expenses (the “Previously Paid Operating Expenses”) until all Previously Paid Operating Expenses incurred to date have been reimbursed; and (ii) second, the Company will apply 50% of the Excess Amount remaining after the payment of Previously Paid Operating Expenses to reimburse the Sponsor for the management fees and incentive fees that the Sponsor has agreed to pay on the Company’s behalf until all such management fees and incentive fees accrued to date have been reimbursed. The Company has not met the Reimbursement Hurdle for the quarter ended March 31, 2018. Therefore, expenses of the Company covered by the Responsibility Agreement have not been recorded as expenses of the Company as of March 31, 2018. In accordance with ASC 450, Contingencies, such expenses will be accrued and payable by the Company in the period that they become both probable and estimable. The Sponsor may demand the reimbursement of cumulative Company expenses covered by the Responsibility Agreement to the extent the Company exceeds the Reimbursement Hurdle during any quarter.

Recently Issued Accounting Pronouncements

Under the Jumpstart Our Business Startups Act (the “JOBS Act”), emerging growth companies can delay the adoption of new or revised accounting standards until such time as those standards apply to private companies. The Company is choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, the Company’s financial statements may not be comparable to those of companies that comply with public company effective dates. There are no new or revised accounting standards that the Company has not adopted.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The update supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the implementation of this standard by one year. ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. Management has adopted this guidance effective for the fiscal period beginning January 1, 2018 using the modified retrospective approach. The guidance does not apply to revenue associated with financial instruments, including loans and investments that are accounted for under other U.S. GAAP. As a result, the adoption of the new revenue recognition guidance did not have any impact on the elements of its consolidated statements of operations, most closely associated with financial instruments, including interest and fees income, and resulted in no cumulative effect adjustment to the opening balance of its net assets.

In January, 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments that are marked to fair value and reported as available-for-sale (“AFS”). ASU 2016-01 requires public business entities that are required to disclose fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price notion consistent with Topic 820, Fair Value Measurement. For public business entities, ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management has adopted this guidance effective for the fiscal period beginning January 1, 2018.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance requires companies to apply the requirements in the year of adoption through cumulative adjustment with some aspects of the update requiring a prospective transition approach. We are currently evaluating the potential impact of the pending adoption of ASU 2016-13 on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).” ASU 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 addresses eight classification issues related to the statement of cash flows: (i) debt prepayment or debt extinguishment, (ii) settlement of zero-coupon bonds, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interest in securitizations transactions and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted this guidance, which did not have any effect on its consolidated financial statements, effective January 1, 2018.

Risk Factors

The Company has limited operating history and is subject to the business risks and uncertainties associated with any new business. As an externally-managed company, the Company is largely dependent on the efforts of the Advisor and other service providers and is dependent on the Sponsor for financial support.

The Company is subject to financial market risks, including changes in interest rates. Global economies and capital markets can and have experienced significant volatility, which has increased the risks associated with investments in collateralized private debt instruments. Investment in the Company carries risk and there are no guarantees that the Company’s investment objectives will be achieved. The Company is also exposed to credit risk related to maintaining all of its cash at a major financial institution.

The Company’s investments consist of loans, loan participations and trade finance that are illiquid and non-traded, making purchase or sale of such financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

The value of the Company’s investments in loans may be detrimentally affected to the extent, among other things, that a borrower defaults on its obligations, there is insufficient collateral securing the loan and/or there are extensive legal and other costs incurred in collecting on a defaulted loan, observable secondary or primary market yields for similar instruments issued by comparable companies increase materially or risk premiums required in the market between smaller companies, such as the

Company’s borrowers, and those for which market yields are observable increase materially. In addition, as of March 31, 2018, all but one of the Company’s investments are denominated in U.S. dollars. If the U.S. dollar rises, it may become more difficult for borrowers to make loan payments if the borrowers are operating in markets where the local currencies are depreciating relative the U.S. dollar.

At March 31, 2018, the Company’s investment portfolio included 46 companies and was comprised of $102,391,843 or 26.6% in senior secured term loans, $148,791,702 or 38.6% in senior secured term loan participations, $116,369,190 or 30.2% in senior secured trade finance participations, $17,500,000 or 4.5% in short term investments, and $322,657 or 0.1% in other investments. The Company’s largest loan by value was $19,423,841 or 5.0% of total investments. The Company’s 5 largest loans by value comprised 23.1% of the Company’s portfolio at March 31, 2018. Participation in loans amounted to 68.8% of the Company’s total portfolio at March 31, 2018.

Note 3. Investments

As of March 31, 2018, the Company’s investments consisted of the following:

					Percentage
	Amortized Cost		Fair Value		of Total Investments
Senior secured term loans	$	102,391,843	$	102,391,843		26.6	%
Senior secured term loan participations		148,753,278		148,791,702		38.6	%
Senior secured trade finance participations		117,211,964		116,369,190		30.2	%
Short term investments		17,500,000		17,500,000		4.5	%
Other investments		386,468		322,657		0.1	%
Total investments	$	386,243,553	$	385,375,392		100.0	%

Participations

The majority of the Company’s investments are in the form of Participation Interests (“Participations”). Participations are interests, which may be divided or undivided, in financing facilities. Participations may be interests in one specific loan or trade finance transaction, several loans or trade finance transactions under a facility, or may be interests in an entire facility. The Company’s rights under Participations include, without limitations, all corresponding rights in payments, collaterals, guaranties, and any other security interests obtained in the underlying financing facilities.

Interest Receivable

Depending on the specific terms of the Company’s investments, interest earned by the Company is payable either monthly, quarterly, or, in the case of most trade finance investments, at maturity. As such, some of the Company’s trade finance investments have up to a year of accrued interest receivable as of March 31, 2018. In addition, certain of the Company’s investments in term loans accrue deferred interest, which is not payable until the maturity of the loans. Accrued deferred interest included in the interest receivable balance as of March 31, 2018 and December 31, 2017 amounted to $2,091,708 and $1,960,157, respectively. The Company’s interest receivable balances at March 31, 2018 and December 31, 2017 are recorded at the amounts that the Company expects to collect.

Trade Finance

Trade finance encompasses a variety of lending structures that support the export, import or sale of goods between producers and buyers in various countries and across various jurisdictions. The strategy is most prevalent in the financing of commodities. The Company’s trade finance positions typically fall into two broad categories: pre-export financing and receivable/inventory financing. Pre-export financing represent advances to borrowers based on proven orders from buyers. For trade finance, the structure and terms vary according to the nature of the transaction being financed. The structure can take the form of a revolver (up to one year) with draw requests with maturity up to one year based on collateral and performance requirements. The structure can also be specific to the individual transaction being financed, which typically have shorter durations of 60 – 180 days. In terms of underwriting, particular consideration is given to the following:

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nature of the goods or transaction being financed,

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the terms associated with the sale and repayment of the goods,

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the execution risk associated with producing, storing and shipment of the goods,

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the financial and performance profile of both the borrower and end buyer(s),

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the underlying advance rate and subsequent LTV associated with lending against the goods that serve to secure the facility or transaction,

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collateral and financial controls (collection accounts and inventory possession),

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third party inspections and insurance, and

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the region, country or jurisdiction in which the financing is being completed.

Collateral varies by transaction, but is typically raw or finished goods inventory, and/or receivables. In the case of pre-export finance, the transaction is secured by purchase orders from buyers or offtake contracts, which are agreements between a buyer and seller to purchase/sell a future product.

Terms depend on the nature of the facility or transaction being financed. As such, they depend on the credit profile of the underlying financing, as well as the speed and detail associated with the request for financing. Interest can be paid as often as monthly or quarterly on revolving facilities (one year in duration) or at maturity when dealing with specific transactions with shorter duration, which is the case for the majority of the Company’s trade finance positions. At times, settlement can be delayed due to documentation, shipment, transportation or port clearing issues, delays associated with the end buyer or off-taker assuming possession, possible changes to contract or offtake terms, and the aggregation of settlement of multiple individual transactions. Conversely, at times payments are made ahead of schedule as transactions either clear faster than expected, borrowers decide to prepay or pay down ahead of schedule, counterparties clear multiple individual transactions in one settlement, or less expensive financing is secured by the borrower.

On occasion, the Company may receive notice that a borrower or counterparty intends to pay ahead of schedule or in one lump sum (settling multiple draw requests all at once). Depending on timing and the ability to redeploy these funds, combined with projected inflows of fund capital, these outsize payments can negatively impact the Company’s performance. In these situations, the credit profile of the borrower, and the transaction in general, is reviewed with the sub-advisor and a request may be made to either stagger payments, where at all possible, or request that payment only be made at the end of that specific financial quarter. These requests or accommodations, which happen very rarely, will only be made where the Company has strong comfort in and around the credit profile of the transaction or borrower.

Short Term Investments

Short term note investments are defined by the Company as investments that generally meet the standard underwriting guidelines for trade finance and term loan transactions and that also have the following characteristics: (1) maturity of less than one year, (2) loans to borrowers to whom, at the time of funding, the Company does not expect to re-lend. Impact data is not tracked for short term investments. In the prior periodic reports, the Company included Short Term Investments within the Trade Finance section of the Schedule of Investments. Due to Short Term Investments’ unique characteristics, the Company has determined to present these investments separately.

Other Investments

The Other Investments represents a foreign currency option contract to hedge the future principal repayment of an investment denominated in euro.

Watch List Investments

Prodesa

As of March 31, 2018, the Company’s investment in Corporacion Prodesa S.R.L. (“Prodesa”) is comprised of two senior secured term loan participations with an aggregate balance of $3,210,000 and $1,750,000 due under a senior secured purchase order revolving credit facility. The Company has been working with Prodesa to re-align its operations since 2015, starting with a senior secured purchase order revolving credit facility. The total accrued interest balance as of March 31, 2018 amounts to $670,677 including $466,103 of deferred interest payable at maturity. The purchase order facility is secured by specific purchase orders from customers of Prodesa, as well as pledges of additional unencumbered assets and all shares of Prodesa. A number of draws and repayments have occurred under this facility. For example, during the year ended December 31, 2016, the Company funded seven additional draws under the purchase order facility for an aggregate of $1,750,000.

and improved collateral supporting the loan facility. Separately, the Company simultaneously entered into amendments for the $750,000 inventory loan facility and the $1,750,000 purchase order facility to extend those facilities to mature concurrently with the amended term loan facility above, as each facility is cross-defaulted and cross-collateralized. The $750,000 inventory loan, with an original maturity date February 15, 2015 and previously extended to December 22, 2016, now matures on July 28, 2021. The $1,750,000 purchase order facility, with an original maximum term of December 31, 2020, now matures on July 28, 2021.

The Company has estimated the fair value of the Prodesa loans as of March 31, 2018 at $4,960,000 based on the income valuation approach as further described in Note 4.

Usivale

In May 2015, one of the Company’s borrowers, Usivale Industria E Commercio (“Usivale”), with an aggregate principal balance of $3,000,000, notified the Company that it would be unable to make its monthly interest payment for May 2015 and requested the deferment of interest payments until October 2015. Usivale is a sugar producer located in Brazil that has been in business since 1958. Usivale’s business is highly cyclical and it generates the majority of its revenues during the first and fourth quarters of any calendar year. In accordance with the terms of the loans, the Company originally increased the annual interest rate charged Usivale from 12.43% to 17.43%. On August 27, 2015, Usivale filed for judicial recuperation or recovery (the “Filing”) with the local court in Brazil. The Filing was led by the ongoing pricing pressure within the sugar market, leading up to the material drop in the month of August, when prices reached a seven year low. The Filing provided for a 180 day “standstill” period relative to any claim for payment by Usivale’s creditors. During this period, Usivale was permitted to operate as usual, but was required to develop and present a recovery plan to its creditors to allow it to emerge from judicial recovery. Usivale submitted an initial plan to the judicial court for review at the end of November 2015, which was published by the court on January 19, 2016. Creditors had 30 days to review and either approve or reject the plan. As the only secured creditor within the greater credit group, the Company’s acceptance of any plan was required. The Company placed Usivale on non-accrual status effective August 27, 2015, the date of the judicial recovery filing.

On February 17, 2016, the Company filed a rejection of the plan presented by Usivale. In accordance with the judicial recovery process, a general assembly of Usivale’s creditors was held on June 14, 2016 and an agreed upon restructure plan was submitted to the court and subsequently approved by the court on October 7, 2016. Under the restructure plan, interest on the principal started accruing effective July 1, 2016 at an annual rate of 12.43% and Usivale is required to make annual principal payments starting in the fourth quarter of 2016. On November 10, 2016, the Company received payments of principal and interest of $316,777 and $144,390, respectively. The Company recorded the $144,390 payment as interest income and started accruing interest on the unpaid principal effective November 10, 2016.

As part of the settlement process, TriLinc developed direct relationships with Usivale’s management, and as such, visited Usivale during September 2017. At the site visit, the company indicated that it expected to pay its scheduled 2017-2018 principal and interest payment on time and in full, assuming relatively steady sugar prices. Post-site visit, sugar prices have compressed significantly, causing added pressure on the cash flow of the business. TriLinc and Usivale have agreed to an extension of this year’s principal payment (spread evenly across the final three years of the loan, such that remaining principal payments comprise of approximately 20% / 20% / 60% amortization, respectively, over the next 3 years). This extension was agreed to in exchange for a flat 0.5% extension fee on the outstanding balance and an increase in pledged contracts. The annual interest payment has been received in full.

As of March 31, 2018, the principal balance of the Usivale loans amounted to $2,851,296 and the Company has estimated the fair value of the Usivale loans at $2,851,296, which is based on a discounted cash flow analysis (income approach). Due to the ongoing volatility, the Company continues to closely monitor sugar prices and the associated impact on Usivale. As of March 31, 2018, accrued interest amounted to $105,340.

Fruit and Nut Distributor

The Company has a trade finance participation with a fruit and nut distributor (the “Distributor”) located in South Africa, with a total balance outstanding of $785,806 of as March 31, 2018. The Distributor’s trade finance participation has a stated maturity date of May 22, 2015, which the Company agreed to extend. The Distributor had made partial payments of principal during 2015 and 2016 (the original loan from the Company to the Distributor was for $1,250,000), with the most recent payment being made in January 2017. Through the latter part of 2015, the depreciation in the South African Rand had proven to be problematic for the Distributor given that it has to purchase its inventory in U.S. Dollars and then sells in South African Rand. This situation has led the Distributor to experience some cash flow difficulties and operating losses. The Company, together with its sub-advisor, had agreed to extend further the principal maturity date to facilitate the strategic sale of the Distributor, which closed in June 2016. As a result of the sale, one of the Company’s sub-advisors now owns 40% of the Distributor. Accordingly, the Company placed this participation on non-accrual status effective February 1, 2016 and interest not recorded relative to the original terms of this participation amounted to approximately $34,379 for the three months ended March 31, 2018. Based on the information available to the Company and according

to its valuation policies, the Company has estimated the fair value of its investment in the Distributor to be $726,729 as of March 31, 2018.

Sesame Seed Exporter

The Company has a trade finance participation with a Sesame Seed Exporter (the “Exporter”) located in Guatemala, with a principal balance outstanding of $881,800 as of March 31, 2018. The participation had a maturity date of March 31, 2016 and is secured by inventory. During 2016, the Exporter lost a major customer, which resulted in a slowdown in business, affecting its ability to repay the amount due under the participation. Although the Exporter was able to secure new customers during 2017 to replace the lost order(s), the Exporter had a shipment rejected and returned, and as a result, the Exporter had difficulties making payments. As the Exporter’s financial position further deteriorated, the Company’s sub-advisor determined that a restructuring of the Exporter’s business was required and, as such, the sub-advisor started taking control over the Exporter’s operations. The Company’s existing loan to the Exporter is also going to be restructured with the following term: 3 year senior secured term loan, secured by share pledge, 12% deferred interest compounded quarterly and payable at maturity, monthly principal amortization based upon available cash flow, expected to begin in June 2018. The Exporter has made three principal payments totaling $92,435 during October and November 2016, an interest payment of $90,402 in February 2017, an interest payment of $8,388 in July 2017 and interest payments of approximately $81,500 during October, November, and December 2017. The Company has determined that the restructured term loan should be valued using the income approach, in accordance with its valuation policy, and has determined that the fair value of this investment should be $881,800 as of March 31, 2018. The Company has, however, placed this position on non-accrual as of July 1, 2017.

Mac Z Group SARL

The Company has a $9,000,000 trade finance position with Mac Z Group SARL (“Mac Z”), a scrap metal recycler in Morocco. As of March 31, 2018, the outstanding principal balance on this position was $7,349,626 and accrued interest amounted to $11,801. The primary collateral securing this position is 1,970 tons of copper scrap. In late October, the sub-advisor’s designated Collateral Manager for Mac Z notified the sub-advisor of an investigation into a 1,820 ton, approximately $13.3 million, shortage of copper scrap inventory physically held in the warehouse. The copper scrap is pledged to the Company and serves as the primary collateral for this position. In addition to conducting its investigation, the sub-advisor has issued an Event of Default and is taking steps to enforce the Corporate Guarantee, Personal Guarantee and relevant pledges, which include two insurance policies. The sub-advisor has placed a blocking notice on all of the borrower’s bank accounts and has requested a freeze order from the Moroccan local courts on the physical assets of the company.

Since the initial discovery and actions, Mac Z sold 108 MT of copper anodes and TGIF was paid approximately $330,000 of interest in January 2018. In addition to these initial sales, Mac Z sold 38 MT of other finished products (e.g., tubes, cables, wire rolls) in late March 2018 and early April 2018. TGIF received a $292,000 payment during the first week of April, which included $110,000 of interest and $182,000 of principal. Mortgages against two unencumbered parcels of land are in the process of being finalized in favor of the lenders under this facility. The land’s value is estimated at $5.9 million. A judgment was received on December 18, 2017, in the English courts ordering the borrower and the corporate guarantor to make payment in an amount to be determined. In parallel to the recovery plan with the borrower, a claim has been filed against the collateral manager under its professional indemnity insurance policy, which covers up to $40 million in loss.

Based on these developments, the Company believes there is sufficient collateral available to cover both the outstanding principal balance and the accrued interest. The Company placed this position on non-accrual effective October 1, 2017 and believes no adjustment to fair value is necessary as of March 31, 2018.

Vicentin – Nacadie S.A.

The Company has a trade finance position with Vicentin – Nacadie S.A (“Vicentin”), an Argentinian company focused on trading of the “soy bean complex” (soybeans, soybean meals, and oils) originating from Argentina, Paraguay and Uruguay. As of March 31, 2018, the outstanding principal balance on this position was $12,000,000 and accrued interest of $805,292. The Company’s sub-advisor, IIG called a technical default on the borrower due to the breach of informational covenants by Vicentin and due to non-payment of interest by Vicentin. The technical default called by IIG resulted in a filing in the Commercial Court in Buenos Aires, Argentina on July 4, 2017. The Commercial Court has jurisdiction over commercial claims/disputes of this type. After IIG filed its claims in the Commercial Court, the court ruled that they were valid claims and enjoined Vicentin’s cash accounts to allow for recovery by IIG. Once sufficient cash had been secured, the court allowed Vicentin to replace the enjoined cash accounts with a payment guarantee from Zurich International with a 100% LTV, including accrued interest.

bond secured by IIG through the Commercial Court, whose value is for all principal and interest outstanding, there is sufficient collateral available to pay off the principal and accrued interest balances in full and the Company has determined the fair value of this investment should remain at $12,000,000.

Frigorifico Regional Industrias Alimentarias S.A. Sucursal Uruguay

The Company has a trade finance position with Frigorifico Regional Industrias Alimentarias S.A. Sucursal Uruguay (“FRIAR”), an Argentinian company that produces, processes and exports bovine meat for human consumption. As of March 31, 2018, the outstanding principal balance on this position was $9,000,000 and accrued interest of $264,500. The Company’s sub-advisor, IIG called a technical event of default due to non-payment by FRIAR. IIG filed the promissory notes for FRIAR in the Commercial Court in Buenos Aires, Argentina. The Commercial Court has jurisdiction over commercial claims/disputes of this type. During January 2018 the court granted IIG’s motion to freeze FRIAR’s accounts. IIG is also in the process of securing additional collateral to cover the full balance outstanding, including accrued interest and penalties. It is expected that once enough cash and assets are secured, FRIAR will secure a payment guarantee bond. IIG has confirmed that FRIAR continues to operate and is a going concern.

As a short-term trade finance facility, FRIAR has historically been valued at cost. The remaining principal balance of $9,000,000 has been outstanding since July 2016. As IIG is seeking full repayment through its court action to secure assets from FRIAR, the Company believes the most appropriate valuation method is the liquidation approach. Until such time as full collateral coverage has been secured through the judicial proceeding, the Company has determined the fair value of this investment should be $8,425,571 as of March 31, 2018. The Company placed the position on non-accrual status effective January 1, 2018.

Sancor Cooperativas Unidas

The Company has a trade finance position with Sancor Cooperativas Unidas (“Sancor”), an Argentinian company that distributes dairy products. As of March 31, 2018, the outstanding principal balance on this position was $6,000,000. Interest has been paid in full through March 31, 2018. Because Sancor did not make the required interest payments for the first and second quarters of 2017 on a timely basis, the sub-advisor began exercising pledged warrants to cover interest payments for 2017 and the first quarter of 2018. The sub-advisor has worked with Sancor to restructure the existing loan and has extended the maturity to July 29, 2018, with an annual renewal option. It is anticipated a further extension will be agreed to as part of the restructuring. As part of the restructure, a co-borrower (Sancor Brazil) was added, additional collateral (face value of $56.6 million) was secured and key customers pay into the sub-advisor’s designated collection account. An unrelated loan from another lender of approximately $26 million was fully repaid by Sancor in the first quarter of 2017 and the release of the associated mortgage and reassignment of the collateral is in the final stages of being released and assigned to the Company. Ultimately, it is believed that Sancor will be sold and that all principal and interest due the Company will be paid upon this sale. Due to the uncertainty associated with the timing of such sale, the Company has determined that the fair value of this investment should be $5,790,732.

Functional Products Trading S.A.

The Company has a trade finance position with Functional Products Trading S.A. (“Functional”), a Chilean company that exports chia seeds to United States and European off-takers. As of March 31, 2018, the outstanding principal balance on this position was $1,326,688. In 2017, Functional experienced operational losses due to volatile prices for raw chia seeds and its byproducts, with sales declining from 2016 by 57%. As a result, the company is developing a full restructuring plan (selling office building and entering lease back agreement) with its current lenders, including the Company, to provide more cash flow flexibility, become current on all interest payments and improve its capital structure, in order to support the company’s growth initiatives. During February 2018, we received $25,000 in interest payments, which covered accrued interest up to the end of November 2017 and $10,000 in March 2018, which brought Functional current on interest payments through December 2017. The Company is currently working with Functional on restructuring the facility, which it believes will be completed in the near term.

As of December 31, 2017, the Company’s investments consisted of the following:

					Percentage
	Amortized Cost		Fair Value		of Total Investments
Senior secured term loans	$	78,573,493	$	78,573,493		23.4	%
Senior secured term loan participations		119,165,378		119,165,378		35.5	%
Senior secured trade finance participations		111,089,698		111,030,621		33.1	%
Short term investments		26,500,000		26,500,000		7.9	%
Total investments	$	335,328,569	$	335,269,492		100.0	%

The industry composition of the Company’s portfolio, at fair market value as of March 31, 2018 and December 31, 2017, was as follows:

	As of March 31, 2018					As of December 31, 2017
	Fair		Percentage			Fair		Percentage
Industry	Value		of Total			Value		of Total
Agricultural Products	$	15,351,296		4.0	%	$	15,351,296		4.6	%
Bulk Fuel Stations and Terminals		16,831,593		4.4	%		16,545,994		4.9	%
Chemicals and Allied Products		15,000,000		3.9	%		15,000,000		4.5	%
Chocolate and Cocoa Products		10,592,240		2.7	%		—		—
Coal and Other Minerals and Ores		35,358,626		9.2	%		31,254,315		9.4	%
Commercial Fishing		911,144		0.2	%		351,559		0.1	%
Consumer Products		10,750,732		2.8	%		10,960,000		3	%
Department Stores		7,640,880		2.0	%		—		—
Drugs, Proprietaries, and Sundries		888,192		0.2	%		1,080,000		0.30	%
Electric Services		18,527,237		4.8	%		18,527,237		5.5	%
Farm Products		20,041,279		5.2	%		7,960,987		2.4	%
Fats and Oils		12,000,000		3.1	%		12,000,000		3.6	%
Financial services		10,000,000		2.6	%		10,000,000		3.0	%
Freight Transportation Arrangement		12,588,963		3.3	%		12,464,320		3.7	%
Fresh or Frozen Packaged Fish		1,503,141		0.4	%		3,338,520		1.0	%
Food Products		726,729		0.2	%		1,072,944		0.3	%
Groceries and Related Products		3,500,000		0.9	%		3,500,000		1.0	%
Hotels and Motels		15,949,324		4.1	%		15,807,931		4.7	%
Land Subdividers and Developers		15,578,276		4.0	%		15,411,497		4.6	%
Logging		6,840,000		1.8	%		6,840,000		2.0	%
Meat, Poultry & Fish		8,425,571		2.2	%		9,000,000		2.7	%
Metals & Mining		3,332,336		0.9	%		4,566,481		1.4	%
Personal Credit Institutions		4,081,077		1.1	%		3,157,735		0.9	%
Petroleum and Petroleum Products		23,000,000		6.0	%		32,000,000		9.5	%
Programming and Data Processing		15,215,332		3.9	%		15,714,764		4.7	%
Refuse Systems		19,423,841		5.0	%		11,315,000		3.4	%
Secondary Nonferrous Metals		17,349,626		4.5	%		17,349,626		5.2	%
Short-Term Business Credit		4,740,000		1.2	%		4,740,000		1.4	%
Soap, Detergents, and Cleaning		1,195,188		0.3	%		1,355,600		0.4	%
Street Construction		10,867,898		2.8	%		10,861,658		3.2	%
Telephone and Telegraph Apparatus		15,431,910		4.0	%		14,388,525		4.3	%
Telephone Communications		18,430,000		4.8	%		—		—
Water Transportation		12,980,304		3.4	%		13,353,503		4.0	%
Other		322,657		0.1	%		—		—
Total	$	385,375,392		100.0	%	$	335,269,492		100.0	%

The table below shows the portfolio composition by geographic classification at fair value as of March 31, 2018 and December 31, 2017:

	As of March 31, 2018					As of December 31, 2017
	Fair		Percentage			Fair		Percentage
Country	Value		of Total			Value		of Total
Argentina	$	38,716,303		10.1	%	$	39,500,000		11.8	%
Botswana		4,740,000		1.2	%		4,740,000		1.4	%
Brazil		18,066,628		4.7	%		18,566,060		5.5	%
Cabo Verde		15,949,324		4.1	%		15,807,931		4.7	%
Cameroon		10,592,240		2.8	%		—		—
Cayman Islands		10,000,000		2.6	%		10,000,000		3.0	%
Chile		1,326,687		0.3	%		1,326,687		0.4	%
China		10,000,000		2.6	%		10,000,000		3.0	%
Colombia		4,081,077		1.1	%		3,157,735		0.9	%
Croatia		7,963,537		2.1	%		—		—
Ecuador		2,414,285		0.6	%		3,690,079		1.1	%
Ghana		34,027,237		8.8	%		34,027,237		10.1	%
Guatemala		881,800		0.2	%		881,800		0.3	%
Hong Kong		45,431,910		11.8	%		41,346,389		12.3	%
Indonesia		14,200,234		3.7	%		14,193,994		4.2	%
Jersey		18,430,000		4.8	%		—		—
Kenya		12,588,963		3.3	%		12,464,320		3.7	%
Malaysia		15,000,000		3.9	%		15,000,000		4.5	%
Mauritius		3,500,000		0.9	%		3,500,000		1.0	%
Mexico		19,423,841		5.0	%		11,315,000		3.4	%
Morocco		7,349,626		1.9	%		7,349,626		2.2	%
Namibia		15,578,276		4.0	%		15,411,497		4.6	%
New Zealand		6,840,000		1.8	%		6,840,000		2.0	%
Nigeria		27,163,096		7.1	%		19,106,003		5.7	%
Peru		21,791,593		5.7	%		21,505,994		6.4	%
South Africa		726,729		0.2	%		1,960,874		0.6	%
United Arab Emirates		888,192		0.2	%		1,080,000		0.3	%
United Kingdom		12,858,626		3.3	%		20,796,451		6.2	%
Zambia		1,195,188		0.3	%		1,355,600		0.4	%
Uganda		3,650,000		1.0	%		—		—
Uruguay		—		—			346,215		0.1	%
Total	$	385,375,392		100.0	%	$	335,269,492		100.0	%

Note 4. Fair Value Measurements

The following table summarizes the valuation of the Company’s investments by the fair value hierarchy levels required under ASC 820 as of March 31, 2018:

	Fair
	Value		Level 1		Level 2		Level 3
Senior secured term loans	$	102,391,843	$	—	$	—	$	102,391,843
Senior secured term loan participations		148,791,702		—		—		148,791,702
Senior secured trade finance participations		116,369,190		—		—		116,369,190
Short term investments		17,500,000		—		—		17,500,000
Other investments		322,657		—		—		322,657
Total	$	385,375,392	$	—	$	—	$	385,375,392

The following table summarizes the valuation of the Company’s investments by the fair value hierarchy levels required under ASC 820 as of December 31, 2017:

	Fair
	Value		Level 1		Level 2		Level 3
Senior secured term loan	$	78,573,493	$	—	$	—	$	78,573,493
Senior secured term loan participations		119,165,378						119,165,378
Senior secured trade finance participations		111,030,621		—		—		111,030,621
Short term investments		26,500,000						26,500,000
Total	$	335,269,492	$	—	$	—	$	335,269,492

The following is a reconciliation of activity for the three months ended March 31, 2018, of investments classified as Level 3:

	Fair Value at December 31, 2017		Purchases		Maturities or Prepayments			Accretion of discounts / Payment-in-kind interest		Net change in unrealized (depreciation) / Foreign exchange gain			Fair Value at March 31, 2018
Senior secured term loans	$	78,573,493	$	23,875,162	$	(791,488	)	$	734,676	$	—		$	102,391,843
Senior secured term loan participations		119,165,378		29,682,456		(538,611	)		444,055		38,424			148,791,702
Senior secured trade finance participations		111,030,621		32,838,045		(26,715,778	)		—		(783,698	)		116,369,190
Short term investments		26,500,000		-		(9,000,000	)		—		—			17,500,000
Other investments		—		386,712							(64,055	)		322,657
Total	$	335,269,492	$	86,782,375	$	(37,045,877	)	$	1,178,731	$	(809,329	)	$	385,375,392

There were no realized gains or losses for any of the Company’s investments classified as Level 3 during the three months ended March 31, 2018 and 2017.

As of March 31, 2018, all of the Company’s portfolio investments utilized Level 3 inputs. The following table presents the quantitative information about Level 3 fair value measurements of the Company’s investments as of March 31, 2018:

	Fair value		Valuation technique	Unobservable input	Range (weighted average)
Senior secured trade finance participations (1)	$	96,727,316	Income approach (DCF)	Market yield	9.0% - 17.5% (10.6%)
Senior secured trade finance participations (2)	$	20,425,571	Collateral based approach	Value of collateral	N/A
Senior secured term loans	$	102,391,843	Income approach (DCF)	Market yield	11.3% - 14.5% (12.5%)
Senior secured term loan participations	$	148,791,702	Income approach (DCF)	Market yield	11.0% - 20.0% (13.5%)
Short term investments	$	17,500,000	Cost Approach	Recent transactions	N/A

(1)

Given the short duration (less than one year) and nature of trade finance positions, in prior periods, the Company used the cost approach to determine the fair value of trade finance positions. Starting December 31, 2017, the Company has determined that using the income approach is more appropriate. The change in valuation approach did not have any effect on the fair value determined for the Company’s trade finance position.

(2)

Income approach used for Vicentin and FRIAR. See Note 3 for further information.

As of December 31, 2017 all of the Company’s portfolio investments utilized Level 3 inputs. The following table presents the quantitative information about Level 3 fair value measurements of the Company’s investments as of December 31, 2017:

	Fair value		Valuation technique	Unobservable input	Range (weighted average)
Senior secured trade finance participations (1)	$	90,030,621	Income approach (DCF)	Market yield	9.0% - 17.5% (10.6%)
Senior secured trade finance participations (2)	$	21,000,000	Collateral based approach	Value of collateral	N/A
Senior secured term loans	$	78,573,493	Income approach (DCF)	Market yield	11.3% - 14.5% (12.5%)
Senior secured term loan participations	$	119,165,378	Income approach (DCF)	Market yield	11.0% - 20.0% (13.5%)
Short term investments	$	26,500,000	Cost Approach	Recent transactions	N/A

(1)

Given the short duration (less than one year) and nature of trade finance positions, in prior periods, the Company used the cost approach to determine the fair value of trade finance positions. As of December 31, 2017, the Company has determined that using the income approach is more appropriate. The change in valuation approach did not have any effect on the fair value determined for the Company’s trade finance position.

(2)

Collateral valuation approach used for Vicentin and FRIAR. See Note 3 for further information.

The significant unobservable Level 3 inputs used in the fair value measurement of the Company’s investments are market yields. Significant increases in market yields would result in significantly lower fair value measurements.

For details of the country-specific risk concentrations for the Company’s investments, refer to the Consolidated Schedule of Investments and Note 3.

Note 5. Related Parties

Agreements

Advisory Agreement

On February 14, 2018, the Company’s board of managers determined to extend the Amended and Restated Advisory Agreement (the “Advisory Agreement”) until February 25, 2019.

Asset management fees payable to the Advisor are remitted quarterly in arrears and are equal to 0.50% (2.00% per annum) of Gross Asset Value, as defined in the Advisory Agreement between the Company and the Advisor. Asset management fees are paid to the Advisor in exchange for fund management and administrative services. Although the Advisor manages, on the Company’s behalf, many of the risks associated with global investments in developing economies, management fees do not include the cost of any hedging instruments or insurance policies that may be required to appropriately manage the Company’s risk.

If certain financial goals are reached by the Company, the Company is required to pay the Advisor an incentive fee that is comprised of two parts: (i) a subordinated fee on net investment income and (ii) an incentive fee on capital gains. The subordinated incentive fee on income is calculated and payable quarterly in arrears and is based upon the Company’s pre-incentive fee net investment income for the immediately preceding quarter. No subordinated incentive fee is earned by the Advisor in any calendar quarter in which the Company’s pre-incentive fee net investment income does not exceed the quarterly preferred return rate of 1.50% (6.00% annualized) (the “Preferred Return”). In any quarter, all of the Company’s pre-incentive fee net investment income, if any, that exceeds the quarterly Preferred Return, but is less than or equal to 1.875% (7.50% annualized) at the end of the immediately preceding fiscal quarter, is payable to the Advisor. For any quarter in which the Company’s pre-incentive fee net investment income exceeds 1.875% on its net assets at the end of the immediately preceding fiscal quarter, the subordinated incentive fee on income equals 20% of the amount of the Company’s pre-incentive fee net investment income.

An incentive fee on capital gains will be earned on investments sold and shall be determined and payable to the Advisor in arrears as of the end of each calendar year. The incentive fee on capital gains is equal to 20% of the Company’s realized capital gains on a cumulative basis from inception, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees on capital gains. The Company had no capital gains and therefore did not accrue an incentive fee on capital gains for the three months ended March 31, 2018 and 2017.

Transactions

As discussed in Note 2, for the three months ended March 31, 2018 and 2017, the Sponsor assumed responsibility for $0 and $1,324,828, respectively, of the Company’s operating expenses, management fees and incentive fees, which are deferred under the Responsibility Agreement.

For the three months ended March 31, 2018 and 2017, the Advisor earned $2,009,600, and $1,520,974, respectively, in management fees and $1,403,506 and $960,348, respectively, in incentive fees.

Since the inception of the Company through March 31, 2018, pursuant to the terms of the Responsibility Agreement, the Sponsor has paid approximately $12,422,100 of operating expenses, management fees and incentive fees on behalf of the Company and will pay or reimburse to the Company an additional $4,238,700 of expenses, which have been accrued by the Sponsor as of March 31, 2018. Such expenses, in the aggregate of $16,660,800 since the Company’s inception, may be expensed and payable by the Company to the Sponsor only if the Company satisfies the Reimbursement Hurdle as further described in Note 2.

As of March 31, 2018 and December 31, 2017, due from affiliates on the Consolidated Statement of Assets and Liabilities in the amounts of $3,758,946 and $3,997,314, respectively, was due from the Sponsor in connection with the Responsibility Agreement for operating expenses which were paid by the Company, but, under the terms of the Responsibility Agreement, are the responsibility of the Sponsor. The Sponsor anticipates paying this receivable in the due course of business.

For the three months ended March 31, 2018 and 2017, the Company paid $6,252 and $625,676, respectively, in dealer manager fees and $19,270 and $2,426,442, respectively, in selling commissions to the Company’s dealer manager, SC Distributors, LLC. These fees and commissions were paid in connection with the sales of the Company’s units to investors and, as such, were recorded against the proceeds from the issuance of units and are not reflected in the Company’s Consolidated Statements of Operations.

Note 6. Organization and Offering Costs

As of March 31, 2018, the Sponsor has paid approximately $17,381,000 of offering costs and $236,000 of organization costs relating to the Offering, all of which were paid directly by the Sponsor on behalf of the Company, and were reimbursed to the Sponsor as disclosed in Note 2 of the consolidated financial statements. Such amounts include approximately $41,000 and $2,386,000 of offering costs, which were incurred by the Sponsor during the three months ended March 31, 2018 and 2017, respectively. During the three months ended March 31, 2018 and 2017, the Company paid $27,765 and $2,401,853, respectively, in reimbursement of offering costs to the Sponsor. Such offering costs reimbursed by the Company have been recognized against the proceeds from the issuance of units.

Since the Company started operations to March 31, 2018, the Company has reimbursed the Sponsor a total of $17,184,266 of offering and organization costs and there is a remaining balance of approximately $428,300 of offering costs that have not been reimbursed to the Sponsor.

Note 7. Notes Payable

The Company notes payable consist of the following:

	March 31, 2018		December 31, 2017
	Outstanding Balance		Outstanding Balance
Promissory notes	$	310,000	$	410,000
Symbiotics facility		22,750,000		22,750,000
Christian Super promissory note		5,000,000		5,000,000
Total notes payable	$	28,060,000	$	28,160,000

Promissory Notes

On October 14, 2016, TGIFC issued $1.635 million in the first series of notes pursuant to a private offering of senior secured promissory notes (the “Notes”). The Notes were issued under an ongoing private offering targeting $100 million in the aggregate amount and will be comprised of four different series with four different issuance and maturity dates. The Notes issued on October 14, 2016 comprised the first series of the Notes.

The Notes have an interest rate of 3.0% per annum plus the one year London Interbank Offered Rate (“LIBOR”) (1.59%) and will be payable quarterly in arrears within 15 days after the end of each calendar quarter. The interest rate is determined on each issuance

date and adjusted on each anniversary of the issuance date and shall not exceed the maximum rate of non-usurious interest permitted by applicable law, with excess interest to be applied to the principal amount of the Note.

On February 17, 2017, TGIFC issued $0.225 million in the second series of the Notes pursuant to such private offering. The notes issued on February 17, 2017 comprised the second series of the Notes and bear interest at a rate of 3.0% per annum plus one year LIBOR (1.74%) as determined on their issuance date.

The entire principal balance of each Note (and any unpaid interest) is due in one balloon payment on the “Maturity Date,” which is the first anniversary of the issuance date that either TGIFC or the applicable noteholder has designated as the Maturity Date by not less than 30 days’ prior written notice to the other party. The principal balance of each Note may not be prepaid, in whole or in part, prior to the Maturity Date.

In October, 2016, the Company transferred all of the shares of all of its wholly owned subsidiaries (the “Subsidiaries”) to TGIFC. The Subsidiaries own all of the Company’s investments. TGIFC’s obligations under the Notes are secured by an equitable mortgage pursuant to the Equitable Mortgage Over Shares by and between TGIFC and Noteholders, dated as of October 14, 2016 granting the holders of Notes a mortgage over 1.86 shares out of a total of 27.11 of the issued and outstanding shares of the Subsidiaries. While the collateral initially pledged under the equitable mortgage greatly exceeds the amount funded under the Notes based on the current net asset value of the Company’s investments held by the Subsidiaries, the Company may issue more shares of the Subsidiaries to secure further financing obligations as long as the pro rata value of TGIFC shares (based on the aggregate net asset value of the investments held by the Subsidiaries) is equal to at least the outstanding amount due and payable under the Notes. The Notes and the equitable mortgage contain representations, warranties and covenants customary for financing and mortgage arrangements of this type. As of March 31, 2018, the Company is in full compliance with all such representations, warranties and covenants.

Symbiotics Facility

On July 3, 2017, TGIFC entered into a $10.5 million Facility Agreement (the “Facility Agreement”) with Micro, Small & Medium Enterprises Bonds S.A. (“MSMEB”) as Lender and Symbiotics SA as Servicer. On November 2, 2017, TGIFC entered into a second Facility Agreement to receive an additional $12.25 million in the second tranche of financing with MSMEB as Lender and Symbiotics SA as Servicer. TGIFC may request an additional $17.5 million under the Facility Agreement, subject to the conditions precedent set forth in the Facility Agreement, including availability of funding.

The Facility Agreement has an interest rate of 4.65% per annum plus the three month LIBOR (1.36% as of December 31, 2017) and will be payable quarterly in arrears within 15 days after the end of each calendar quarter. The interest rate shall not exceed the maximum rate of non-usurious interest permitted by applicable law, with excess interest to be applied to the principal amount of the note.

The entire principal balance under the Facility Agreement (and any unpaid interest) is due in one balloon payment on July 7, 2020 (the “Maturity Date”). The principal balance under the Facility Agreement may be voluntarily prepaid, in whole or in part, prior to the Maturity Date, subject to a prepayment premium of 1.00% of the prepayment amount if the voluntary prepayment is made prior to July 3, 2019.

TGIFC’s obligations under the Facility Agreement is secured by an equitable mortgage pursuant to the Equitable Mortgage Over Shares by and between TGIFC and MSMEB, dated as of July 3, 2017 granting the holders of the Facility Agreement a mortgage over 20.25 shares out of a total of 27.11 of the issued and outstanding shares of the Subsidiaries. While the collateral initially pledged under the equitable mortgage greatly exceeds the amount funded under the Facility Agreement based on the current net asset value of the Company’s investments held by the Subsidiaries, the Company may issue more shares of the Subsidiaries to secure further financing obligations as long as the pro rata value of TGIFC shares (based on the aggregate net asset value of the investments held by the Subsidiaries) is equal to at least the outstanding amount due and payable under the Facility Agreement. The Facility Agreement and the equitable mortgage contain representations, warranties and covenants customary for financing and mortgage arrangements of this type. As of March 31, 2018, the Company is in full compliance with all such representations, warranties and covenants.

Christian Super Promissory Note

On August 7, 2017, TGIFC issued $5 million in the first of a Series 1 Senior Secured Promissory Notes private offering (the “CS Note”) to State Street Australia Ltd ACF Christian Super (“Christian Super”). The CS Note was issued pursuant to an ongoing private offering targeting $25 million in the aggregate amount and will be comprised of up to five different series with five different issuance dates, but likely the same maturity date (collectively “the CS Notes”). The CS Note issued on August 7, 2017 comprised the first series of the CS Notes. Borrowings from the CS Notes offering will be used to pursue the Company’s investment strategy and for general corporate purposes.

The CS Notes have an interest rate of 4.0% per annum plus the one year LIBOR (1.73%) and will be payable quarterly in arrears within 15 days after the end of each calendar quarter. The interest rate may not exceed the maximum rate of non-usurious interest permitted by applicable law, with excess interest to be applied to the principal amount of the CS Note.

The entire principal balance under the CS Note (and any unpaid interest) is due in one balloon payment on August 7, 2021, which is the fourth anniversary of the issuance date. The principal balance of the CS Note may be prepaid prior to the maturity date without premium or penalty.

TGIFC’s obligations under the CS Notes is secured by an equitable mortgage pursuant to the Equitable Mortgage Over Shares by and between TGIFC and the Noteholders, dated as of August 7, 2017 (the “CS Equitable Mortgage”), granting the holder of the CS Notes a mortgage over 5 shares out of a total of 27.11 of the issued and outstanding shares of the Subsidiaries. While the collateral initially pledged under the CS Equitable Mortgage greatly exceeds the amount funded under the CS Notes based on the current net asset value of the Company’s investments held by the Subsidiaries, the Company may issue more shares of the Subsidiaries to secure further financing obligations as long as the pro rata value of TGIFC shares (based on the aggregate net asset value of the investments held by the Subsidiaries) is equal to at least the outstanding amount due and payable under the CS Notes. The CS Note and the CS Equitable Mortgage contain representations, warranties and covenants customary for financing and mortgage arrangements of this type. As of March 31, 2018, the Company is in full compliance with all such representations, warranties and covenants.

For the three months ended March 31, 2018 and 2017, the Company recognized $448,620 and $19,742, respectively, in interest expense. Due to the variable rate structure of these borrowings, the carrying basis of these debt obligations is considered to approximate their fair value.

The principal payments due on borrowings for each of the next five years ending December 31 and thereafter, are as follows:

Year ending December 31:	Principal payments
2018	$	310,000
2019		-
2020		22,750,000
2021		5,000,000
Thereafter		-
	$	28,060,000

Note 8. Unit Capital

As of March 31, 2018, the Company has six classes of units: Class A, Class C, Class I, Class W, Class Y and Class Z units. The unit classes have different upfront sales commissions and dealer manager fees and there are ongoing distribution fees, dealer manager fees and/or service fees with respect to certain classes of units, including a distribution fee with respect to Class C units, an ongoing dealer manager fee with respect to Class I and Class W units, and an ongoing service fee with respect to Class W units. As of March 31, 2018, the Company recorded a liability in the aggregate amount of $1,677,000 for the estimated future amount of ongoing distribution fees, manager fees and service fees payable. The estimated liability is calculated based on a net asset value per Class C, Class I and Class W units of $8.507 with a distribution fee of 0.8% for Class C units, a dealer manager fee of 0.5% for Class I units, and aggregate dealer and service fees of 0.75% for Class W units, per annum applied to the net asset value, during the expected period that Class C, Class W and Class I units remain outstanding, and discounted using an annual rate of 4%. All units participate in the income and expenses of the Company on a pro-rata basis based on the number of units outstanding. The following table is a summary of unit activity during the three months ended March 31, 2018:

	Units							Units
	Outstanding				Units			Outstanding
	as of		Units Issued		Repurchased			as of
	December 31,		During		During			March 31,
	2017		the Period		the Period			2018
Class A units		18,240,073		172,601		(228,794	)		18,183,880
Class C units		8,411,343		82,943		(67,605	)		8,426,681
Class I units		10,442,009		213,050		(96,099	)		10,558,960
Class W units		-		24,555		-			24,555
Class Y units		1,089,678		26,375		-			1,116,053
Class Z units		-		5,877,513		-			5,877,513
Total		38,183,103		6,397,037		(392,498	)		44,187,642

The total of 6,397,037 units issued during the three months ended March 31, 2018 included 304,970 units issued under the DRP at a value of $2,702,524.

Beginning June 11, 2014, the Company commenced a unit repurchase program pursuant to which the Company may conduct quarterly unit repurchases of up to 5% of the weighted average number of outstanding units in any 12-month period to allow the Company’s unitholders, who have held units for a minimum of one year, to sell their units back to the Company at a price equal to the then current offering price less the sales fees associated with that class of units. On March 3, 2017, the board of managers authorized an amendment to the unit repurchase program and commencing with redemption requests processed at the end of the second quarter of 2017, units were redeemed at a price equal to the greater of $9.025 or the estimated net asset per unit for each class of units, as most recently disclosed by the Company in a public filing with the SEC. On March 7, 2018, the board authorized a further amendment to the Company’s unit repurchase program and commencing with repurchase requests processed on the last day of the first quarter of 2018, units are redeemed at a price equal to the most recently determined net asset value per unit for each class of units, as most recently disclosed by the Company in a public filing with the SEC at the time of redemption. Redemptions for the first quarter of 2018 were redeemed at the price equal to $8.507 for Class A units, Class C units, Class I units and Class Y unit, which was the net asset value per unit of each class as of September 30, 2017, the most recently disclosed net asset value at the time of redemption. Redemptions for the second quarter of 2018 will be redeemed at a price equal to $8.466 per Class A unit, Class C units, Class I unit and Class Y units, which was the net asset value per unit of each class as of December 31, 2017. The unit repurchase program includes numerous restrictions, including a one-year holding period, that limit the ability of the Company’s unitholders to sell their units. Unless the Company’s board of managers determines otherwise, the Company will limit the number of units to be repurchased during any calendar year to the number of units that can be repurchased with the proceeds the Company receives from the sale of units under the Company’s DRP. At the sole discretion of the Company’s board of managers, the Company may also use cash on hand, cash available from borrowings and cash from the repayment or liquidation of investments as of the end of the applicable quarter to repurchase units.

During the three months ended March 31, 2018, the Company received 84 repurchase requests for a total of 392,497 units at a repurchase price of $8.507 per unit. As of March 31, 2018, these repurchase requests were pending processing and were completed by the Company on April 11, 2018.

Note 9. Distributions

Starting in July 2013, the Company has paid monthly distributions for all classes of units. The following table summarizes the distributions paid for the three months ended March 31, 2018:

		Daily Rate		Cash		Distributions		Total
Months ended	Date Declared	Per Unit		Distributions		Reinvested		Declared
January 31, 2018	January 16, 2018	$	0.00197808	$	1,352,250	$	988,859	$	2,341,109
February 28, 2018	February 14, 2018	$	0.00197808		1,543,566		895,266		2,438,832
March 31, 2018	March 25, 2018	$	0.00168675		1,505,460		818,399		2,323,859
Total for 2018				$	4,401,276	$	2,702,524	$	7,103,800

Note 10. Financial Highlights

The following is a schedule of financial highlights of the Company for the three months ended March 31, 2018 and 2017.

	Three Months Ended
	March 31,			March 31,
	2018			2017
Per unit data (1):
Net asset value at beginning of period	$	8.42		$	8.55
Net investment income	$	0.13		$	0.15
Net change in unrealized depreciation on investments	$	(0.02	)	$	-
Net increase in net assets resulting from operations	$	0.11		$	0.15
Net change in offering costs	$	0.01		$	-
Distributions	$	(0.17	)	$	(0.18	)
Net change in accrued distribution and other fees	$	0.01		$	(0.06	)
Net decrease in net assets	$	(0.04	)	$	(0.08	)
Net asset value at end of period (2)	$	8.38		$	8.47
Total return based on net asset value (3)		1.35	%		1.79	%
Net assets at end of period	$	370,446,814		$	302,673,743
Units Outstanding at end of period		44,187,642			35,739,018
Ratio/Supplemental data (annualized) (3):
Ratio of net investment income to average net assets		5.63	%		7.04	%
Ratio of net operating expenses to average net assets		5.36	%		2.75	%

1	The per unit data was derived by using the weighted average units outstanding during the three months ended March 31, 2018 and 2017 which were 42,272,734 and 31,423,215.

For financial statement reporting purposes under GAAP, as of March 31, 2018, the Company recorded a liability in the amount of $1,677,000 for the estimated future amount of Class C Distribution Fees, Class I Dealer Manager Fees, Class W Dealer Manager Fees and Class W Services Fees payable. This liability is reflected in this table, which is consistent with the financial statements. While the Company follows GAAP for financial reporting purposes, it has determined that deducting the accrual for the estimated future amount of Class C Distribution Fees, Class I Dealer Manager Fees, Class W Dealer Manager Fees and Class W Services Fees may not be the appropriate approach for determining the net asset value used on the quarterly investor statements and for other purposes. The Company believes that not making such deduction for purposes of net asset value determination is consistent with the industry standard and is more appropriate since the Company intends for the net asset value to reflect the estimated value on the date that the Company determines its net asset value. As of March 31, 2018, based on the new approach to the treatment of future Class C Distribution Fees, Class I Dealer Manager Fees, Class W Dealer Manager Fees and Class W Services Fees, the Company has calculated the net asset value to be $8.421 for all units. If the Company would have used the same approach for presentation in determining the net asset value as of March 31, 2017, the net asset value per unit would have been $8.529.

Total return, ratio of net investment income and ratio of operating expenses to average net assets for the three months ended March 31, 2017, prior to the effect of the Responsibility Agreement were as follows; total return: 1.3%, ratio of net investment income; 5.12%, and ratio of operating expenses to average net assets: 4.67%.

4	The Company’s net investment income has been annualized assuming consistent results over a full fiscal year, however, this may not be indicative of actual results over a full fiscal year.

Note 11. Subsequent Events

The Company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in the Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the three months ended March 31, 2018, except as discussed below.

Distributions

On April 10, 2018, with the authorization of the Company’s board of managers, the Company declared distributions for all classes of units for the period from April 1 through April 30, 2018. These distributions were calculated based on unitholders of record for each day in an amount equal to $0.00168675 per unit per day (less the distribution fee with respect to Class C units , an ongoing dealer manager fee with respect to certain Class I units and Class W units, and an ongoing service fee with respect to Class W units).

On May 1, 2018, $1,384,035 of these distributions were paid in cash and on April 30, 2018, $800,072 were reinvested in units for those unitholders participating in the DRP.

On May 8, 2018, with the authorization of the Company’s board of managers, the Company declared distributions for all classes of units for the period from May 1 through May 31, 2018. These distributions will be calculated based on unitholders of record for each day in an amount equal to $0.00168675 per unit per day (less the distribution fee with respect to Class C units , an ongoing dealer manager fee with respect to certain Class I units and Class W units, and an ongoing service fee with respect to Class W units). These distributions will be paid in cash or reinvested in units, for those unitholders participating in the DRP on or about June 1, 2018.

Investments

Subsequent to March 31, 2018 through May 10, 2018, the Company funded approximately $28.8 million in new investments and received proceeds from repayment of investments of approximately $37.2 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Company’s financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q.

Except as otherwise specified, references to “we,” “us,” “our,” or the “Company,” refer to TriLinc Global Impact Fund, LLC.

Forward Looking Statements

Some of the statements in this Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this Quarterly Report involve risks and uncertainties, including statements as to:

•

our future operating results;

•

our ability to purchase or make investments in a timely manner;

•

our business prospects and the prospects of our borrowers;

•

the economic, social and/or environmental impact of the investments that we expect to make;

•

our contractual arrangements and relationships with third parties;

•

our ability to make distributions to our unitholders;

•

the dependence of our future success on the general economy and its impact on the companies in which we invest;

•

the availability of cash flow from operating activities for distributions and payment of operating expenses;

•

the performance of our Advisor, our sub-advisors and our Sponsor;

•

our dependence on our Advisor and our dependence on and the availability of the financial resources of our Sponsor;

•

the ability of our borrowers to make required payments;

•

our Advisor’s ability to attract and retain sufficient personnel to support our growth and operations;

•

the lack of a public trading market for our units;

•

our limited operating history;

•

our ability to borrow funds;

•

our expected financings and investments;

•

the adequacy of our cash resources and working capital;

•

performance of our investments relative to our expectations and the impact on our actual return on invested equity, as well as the cash provided by these investments;

•

any failure in our Advisor’s or sub-advisors’ due diligence to identify all relevant facts in our underwriting process or otherwise;

•

the ability of our sub-advisors and borrowers to achieve their objectives;

•

the effectiveness of our portfolio management techniques and strategies;

•

failure to maintain effective internal controls; and

•

the loss of our exemption from the definition of an “investment company” under the Investment Company Act of 1940, as amended.

We use words such as “anticipates,” “believes,” “expects,” “intends” and similar expressions to identify forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements for any reason.

The foregoing list of factors is not exhaustive. We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we may file in the future with the SEC.

Overview

We make impact investments in SMEs that provide the opportunity to achieve both competitive financial returns and positive measurable impact. We were organized as a Delaware limited liability company on April 30, 2012. We have operated and intend to continue to operate our business in a manner that will permit us to maintain our exemption from registration under the Investment Company Act of 1940, as amended. We use the proceeds raised from the issuance of units to invest in SMEs through local market sub-advisors in a diversified portfolio of financial assets, including direct loans, loan participations, convertible debt instruments, trade finance, structured credit and preferred and common equity investments. A substantial portion of our assets consists of collateralized private debt instruments, which we believe offer opportunities for competitive risk-adjusted returns and income generation. We are externally managed and advised by TriLinc Advisors, LLC, or the Advisor. The Advisor is an investment advisor registered with the SEC.

Our business strategy is to generate competitive financial returns and positive economic, social and environmental impact by providing financing to SMEs, which we define as those business having less than 500 employees, primarily in developing economies. To a lesser extent, we may also make impact investments in companies that may not meet our technical definition of SMEs due to a larger number of employees but that also provide the opportunity to achieve both competitive financial returns and positive measurable impact. We generally expect that such investments will have similar investment characteristics as SMEs as defined by us. Our style of investment is referred to as impact investing, which J.P. Morgan Global Research and Rockefeller Foundation in a 2010 report called “an emerging alternative asset class” and defined as investing with the intent to create positive impact beyond financial return. We believe it is possible to generate competitive financial returns while creating positive, measurable impact. We measure the economic, social and environmental impact of our investments using industry-standard metrics, including the Impact Reporting and Investment Standards. Through our investments in SMEs, we intend to enable job creation and stimulate economic growth.

We commenced the Offering on February 25, 2013. Pursuant to the Offering, we were offering on a continuous basis up to $1.5 billion in units of our limited liability company interest, consisting of up to $1.25 billion of units in the primary offering consisting of Class A and Class C units at initial offering prices of $10.00 and $9.576 per unit, respectively, and Class I units at $9.025 per unit, and up to $250 million of units pursuant to the Distribution Reinvestment Plan. SC Distributors, LLC was the dealer manager for the Offering. In May 2012, the Advisor purchased 22,161 Class A units for aggregate gross proceeds of $200,000. On June 11, 2013, we satisfied the minimum offering requirement of $2,000,000 when the Sponsor purchased 321,330 Class A units for aggregate gross proceeds of $2,900,000 and we commenced operations. The Offering terminated on March 31, 2017. Through the termination of the Offering, we raised approximately $361,776,000 in gross proceeds, including approximately $13,338,000 raised through the Distribution Reinvestment Plan.

Upon termination of the Offering, we registered $75 million in Class A, Class C and Class I units to continue to be offered pursuant to our Distribution Reinvestment Plan to the investors who have purchased units in the Offering. On March 7, 2018, our board of managers approved an amendment to our distribution reinvestment plan, pursuant to which, commencing with distributions declared for the month of March 2018, which were reinvested on March 30, 2018, units issued pursuant to the Distribution Reinvestment Plan are being offered at the price equal to the net asset value per unit of each class of units, as most recently disclosed by the Company in a public filing with the SEC at the time of reinvestment. Distributions declared for the month of March 2018 were reinvested at a price equal to $8.507 for Class A units, Class C units, and Class I units, which was the net asset value per unit as of September 30, 2017, the most recently disclosed net asset value per unit at the time of reinvestment. Distributions declared for the month of April 2018 will be reinvested at a price equal to $8.466 per Class A unit, Class C units and Class I unit, which was the net asset value per unit as of December 31, 2017. We will offer units pursuant to the Distribution Reinvestment Plan until we sell all of $75 million worth of units, although our board may determine to terminate the offering prior thereto. The offering must be registered or exempt from registration in every state in which we offer or sell units. If the offering is not exempt from registration, the required registration generally is for a period of one year. Therefore, we may have to stop selling units in any state in which the registration is not renewed annually and the offering is not otherwise exempt from registration.

For the three months ended March 31, 2018, we issued 304,970 of our units pursuant to our Distribution Reinvestment Plan for gross proceeds of approximately $2,703,000. In addition, for the three months ended March 31, 2018, we issued 6,092,066 of our units for gross proceeds of approximately $51,861,000 pursuant to a private placement. As of March 31, 2018, we had issued 46,718,647 of our units, including 2,754,265 units issued under our Distribution Reinvestment Plan, for gross proceeds of approximately $439,306,000 including approximately $24,803,000 reinvested under our Distribution Reinvestment Plan (before dealer manager fees of approximately $4,786,000 and selling commissions of $16,924,000, for net proceeds of $417,596,000).

Investments

Our investment objectives are to provide our unitholders current income, capital preservation, and modest capital appreciation. These objectives are achieved primarily through SME trade finance and term loan financing, while employing rigorous risk-mitigation and due diligence practices, and transparently measuring and reporting the economic, social and environmental impacts of our investments. The majority of our investments are senior and other collateralized loans to SMEs with established, profitable businesses

in developing economies. With the twelve sub-advisors that we have contracted to assist the Advisor in implementing the Company’s investment program, we expect to provide growth capital financing generally ranging in size from $5-20 million per transaction for direct SME loans and $500,000 to $15 million for trade finance transactions. We seek to protect and grow investor capital by: (1) targeting countries with favorable economic growth and investor protections; (2) partnering with sub-advisors with significant experience in local markets; (3) focusing on creditworthy lending targets who have at least 3-year operating histories and demonstrated cash flows enabling loan repayment; (4) making primarily debt investments, backed by collateral and borrower guarantees; (5) employing best practices in our due diligence and risk mitigation processes; and (6) monitoring our portfolio on an ongoing basis.

Investments will continue to be primarily credit facilities to developing economy SMEs, including trade finance and term loans, through the Advisor’s team of professional sub-advisors with a local presence in the markets where they invest. As of March 31, 2018, more than a majority of our investments were in the form of participations and we expect that future investments will continue to be primarily participations. We typically provide financing that is collateralized, has a short to medium-term maturity and is self-liquidating through the repayment of principal. By providing additional liquidity to growing small businesses, we believe we support both economic growth and the expansion of the global middle class.

Revenues

Since we anticipate that the majority of our assets will consist of trade finance instruments and term loans, we expect that the majority of our revenue will continue to be generated in the form of interest. Our senior and subordinated debt investments may bear interest at a fixed or floating rate. Interest on debt securities is generally payable monthly, quarterly or semi-annually. In some cases, some of our investments may provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid interest generally is due at the maturity date. In addition, we generate revenue in the form of acquisition and other fees in connection with some transactions. Original issue discounts and market discounts or premiums are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans and debt securities as interest income. Dividend income, if any, will be recognized on an accrual basis to the extent that we expect to collect such amounts.

Expenses

Our primary operating expenses include the payment of asset management fees and expenses reimbursable to our Advisor under the Advisory Agreement. We bear all other costs and expenses of our operations and transactions.

Since our inception through, our Sponsor has assumed the majority of our operating expenses under the terms of the Responsibility Agreement. As of, the Sponsor has agreed to pay a cumulative total of approximately $16.7 million of operating expenses.

Portfolio and Investment Activity

During the three months ended March 31, 2018, we invested approximately $86,966,000 across 15 separate portfolio companies, including 4 new borrowers. Our investments consisted of senior secured trade finance participations, senior secured term loan participations, senior secured term loans, and short term notes. Additionally, we received proceeds from repayments of investment principal of approximately $37,046,000.

At March 31, 2018 and December 31, 2017, the Company’s investment portfolio included 46 and 43 companies, respectively, and the fair value of our portfolio was comprised of the following:

	As of March 31, 2018					As of December 31, 2017
	Investments		Percentage of			Investments		Percentage of
	at Fair Value		Total Investments			at Fair Value		Total Investments
Senior secured term loans	$	102,391,843		26.6	%	$	78,573,493		23.5	%
Senior secured term loan participations		148,791,702		38.6	%		119,165,378		35.5	%
Senior secured trade finance participations		116,369,190		30.2	%		111,030,621		33.1	%
Short term investments *		17,500,000		4.5	%		26,500,000		7.9	%
Other investments **		322,657		0.1	%		-		-
Total investments	$	385,375,392		100.0	%	$	335,269,492		100.0	%

*Short term investments are defined by the Company as investments that generally meet the standard underwriting guidelines for trade finance and term loan transactions and that also have the following characteristics: (1) maturity of less than one year, (2) loans to

borrowers to whom, at the time of funding, the Company does not expect to re-lend. Impact data is not tracked for short term investments.

** The Other investments represents a foreign currency option contract to hedge the future principal repayment of an investment denominated in euro.

As of March 31, 2018, the weighted average yields, based upon the cost of our portfolio, on trade finance participations, term loan participations, senior secured term loans, and short term investments were 11.6%, 13.4%, 12.5%, and 8.1%, respectively, for a weighted average yield on investments of approximately 12.4% on our total portfolio.

As of December 31, 2017, the weighted average yield, based upon the cost of our portfolio, on trade finance participations, term loan participations, senior secured term loans, and short term investments were 10.6%, 13.5%, 12.5%, and 8.4%, respectively, for a weighted average yield on investments of approximately 11.9% on our total portfolio.

As of March 31, 2018, we had the following investments:

Description

Sector

Industry Classification (1)

Country

Interest

Maturity (2)

Principal

Amount

Fair Value

IT Service Provider

Programming and Data Processing

Access to Technology

Brazil

13.50%

10/21/2022

15,215,332

Minor Metals Resource Trader

Secondary Nonferrous Metals

Access to Technology

China

12.00%

6/22/2021

10,000,000

Consumer Lender

Personal Credit Institutions

Inclusive Finance

Colombia

11.25%

8/1/2021

4,081,077

Resource Trader

Coal and Other Minerals and Ores

Responsible Natural Resources Distribution

Hong Kong

11.50%

12/27/2020

15,000,000

Wholesale Distributor

Chemicals and Allied Products

Responsible Industrial Goods Distribution

Malaysia

12.00%

3/31/2020

15,000,000

Waste to Fuels Processor

Refuse Systems

Recycling

Mexico

14.50%

7/27/2021

19,423,841

Sustainable Timber Exporter

Logging

Sustainable Forestry

New Zealand

11.50%

2/10/2021

6,840,000

Clean Diesel Distributor

Bulk Fuel Stations and Terminals

Responsible Fuel Storage

Peru

11.50%

7/27/2019

15,000,000

16,831,593

SME Financier

Short-Term Business Credit

Inclusive Finance

Botswana

12.04%

8/18/2021

4,740,000

Sugar Producer

Agricultural Products

Sustainable Agriculture & Agroprocessing

Brazil

12.43%

12/15/2020

2,851,296

Hospitality Service Provider

Hotels and Motels

Infrastructure Development

Cabo Verde

13.50%

8/21/2021

15,949,324

Mall Operator

Department Stores

Infrastructure Development

Croatia

13.00%

1/23/2021

7,602,456

7,640,880

Tank Farm Operator

Petroleum and Petroleum Products

Responsible Fuel Storage

Ghana

12.00%

8/10/2021

15,500,000

Power Producer

Electric Services

Responsible Power Generation

Ghana

11.66%

8/31/2021

18,527,237

Infrastructure and Logistics Provider

Street Construction

Infrastructure Development

Indonesia

20.00%

11/22/2019

10,909,500

10,867,898

Vessel Operator

Metals & Mining

Responsible Metals Production

Indonesia

11.00%

6/8/2020

3,332,336

Mobile Network Operator

Telephone Communications

Access to Technology

Jersey

12.35%

3/28/2023

19,000,000

18,430,000

Freight and Cargo Transporter

Freight Transportation Arrangement

Responsible Logistics Management

Kenya

13.57%

3/31/2023

12,588,963

Property Developer

Land Subdividers and Developers

Infrastructure Development

Namibia

12.50%

8/15/2021

15,688,098

15,578,276

Marine Logistics Provider

Water Transportation

Responsible Logistics Management

Nigeria

16.84%

9/16/2020

13,029,470

12,980,304

Diaper Manufacturer

Consumer Products

Responsible Consumer Goods Production

Peru

12.00% - 13.00%

7/28/2021

4,960,000

Grain Processor

Farm Products

Sustainable Agriculture & Agroprocessing

Uganda

12.00%

12/31/2020

3,650,000

FMCG Manufacturer

Soap, Detergents, and Cleaning

Responsible Consumer Goods Production

Zambia

11.00%

11/16/2019

1,195,188

Agriculture Distributor

Agricultural Products

Sustainable Agriculture & Agroprocessing

Argentina

9.00%

6/30/2018

12,500,000

Dairy Co-Operative

Consumer Products

Sustainable Dairy Production

Argentina

10.67%

7/29/2018

6,000,000

5,790,732

Beef Exporter

Meat, Poultry & Fish

Sustainable Dairy Production

Argentina

11.50%

8/31/2017

9,000,000

8,425,571

Oilseed Distributor

Fats and Oils

Sustainable Agriculture & Agroprocessing

Argentina

8.75% - 9.00%

2/22/2018

12,000,000

Cocoa & Coffee Exporter

Chocolate and Cocoa Products

Sustainable Agriculture & Agroprocessing

Cameroon

17.50%

10/13/2018 - 10/29/2018

10,592,240

Chia Seed Exporter

Farm Products

Sustainable Agriculture & Agroprocessing

Chile

10.90%

3/4/2018

1,326,687

Shrimp Exporter

Fresh or Frozen Packaged Fish

Sustainable Aquaculture & Processing

Ecuador

9.25%

7/24/2018

1,503,141

Fish Processor & Exporter

Commercial Fishing

Sustainable Aquaculture & Processing

Ecuador

9.00%

8/18/2018

322,300

Tuna Processor

Commercial Fishing

Sustainable Aquaculture & Processing

Ecuador

9.50%

5/9/2018

588,844

Sesame Seed Exporter

Farm Products

Sustainable Agriculture & Agroprocessing

Guatemala

12.00%

3/31/2016

881,800

Mobile Phone Distributor

Telephone and Telegraph Apparatus

Access to Technology

Hong Kong

10.00%

4/3/2018 - 5/23/2018

15,431,910

Non-Ferrous Metal Trader

Coal and Other Minerals and Ores

Responsible Metals Distribution

Hong Kong

9.50%

7/5/2018 - 8/18/2018

15,000,000

Vanilla Exporter

Groceries and Related Products

Sustainable Agriculture & Agroprocessing

Mauritius

11.82%

11/8/2018

3,500,000

Scrap Metal Recycler

Secondary Nonferrous Metals

Recycling

Morocco

11.00%

7/31/2018

7,349,626

Cocoa Exporter

Farm Products

Sustainable Agriculture & Agroprocessing

Nigeria

17.50%

9/7/2018 - 10/20/2018

4,515,692

Cocoa Distribution

Farm Products

Sustainable Agriculture & Agroprocessing

Nigeria

17.50%

8/18/2018 - 9/19/2018

2,709,720

Cocoa Producer

Farm Products

Sustainable Agriculture & Agroprocessing

Nigeria

17.50%

9/19/2018 - 10/22/2018

3,536,089

Cocoa Trader

Farm Products

Sustainable Agriculture & Agroprocessing

Nigeria

17.50%

9/27/2018 - 10/7/2018

3,421,291

Fruit & Nut Distributor

Food Products

Sustainable Agriculture & Agroprocessing

South Africa

12.00%

5/22/2015

785,806

726,729

Pharmaceuticals Distributor

Drugs, Proprietaries, and Sundries

Access to Healthcare and Pharmaceuticals

United Arab Emirates

14.60%

1/30/2018

888,192

Metals Trader

Coal and Other Minerals and Ores

Responsible Metals Distribution

United Kingdom

9.68% - 11.56%

5/7/2018 - 8//292018

5,358,626

Financial Services Provider

Financial Services

Short Term Notes

Cayman Islands

7.50%

2/28/2018

10,000,000

Energy Commodity Trading

Petroleum and Petroleum Products

Short Term Notes

United Kingdom

8.88%

1/31/2018

7,500,000

Foreign currency put option

Other

Croatia

N/A

1/23/2021

N/A

322,657

Total Investments

385,375,392

¹ In prior periods, the Company has used Standard Industrial Classification (SIC) codes for purposes of presentation of its investments in publicly filed and other offering documents. There are several industry classification systems widely used by the investment industry and there is no specific industry classification system the Company is required to use either internally or in its public materials. The Company believes that the traditional industrial classification systems, including SIC codes, do not accurately reflect the sustainable nature of certain of the Company’s investments and, in some cases, may be misleading. Therefore, starting with the quarter ending December 31, 2017, the Company has determined to use a Company created industry classification system for presentation of its investments, which the Company believes will be more appropriate in light of the sustainable nature of the Company’s investments.

² Trade finance borrowers may be granted flexibility with respect to repayment relative to the stated maturity date to accommodate specific contracts and/or business cycle characteristics. This flexibility in each case is agreed upon between the Company and the sub-advisor and between the sub-advisor and the borrower.

As of March 31, 2018, the composition our investments based on the Company created industry classification was as follows:

Industry Classification	Value		of Total
Access to Healthcare and Pharmaceuticals	$	888,192		0.2	%
Access to Technology		59,077,242		15.3	%
Inclusive Finance		8,821,077		2.2	%
Infrastructure Development		50,036,378		13.0	%
Recycling		26,773,467		7.0	%
Responsible Consumer Goods Production		6,155,188		1.6	%
Responsible Fuel Storage		32,331,593		8.4	%
Responsible Industrial Goods Distribution		15,000,000		3.9	%
Responsible Logistics Management		25,569,267		6.6	%
Responsible Metals Distribution		20,358,626		5.3	%
Responsible Metals Production		3,332,336		0.9	%
Responsible Natural Resources Distribution		15,000,000		3.9	%
Responsible Power Generation		18,527,237		4.8	%
Short Term Notes		17,500,000		4.5	%
Sustainable Agriculture & Agroprocessing		62,211,544		16.2	%
Sustainable Aquaculture & Processing		2,414,285		0.6	%
Sustainable Dairy Production		14,216,303		3.7	%
Sustainable Forestry		6,840,000		1.8	%
Other		322,657		0.1	%
Total	$	385,052,735		100.0	%

Concentration Limits

The Company is subject to the following concentration limits:

•

Maximum 45% regional exposure

•

Maximum 20% country exposure

•

Maximum 5% individual investment exposure

As of March 31, 2018, the Company was in compliance with all of the above concentration limits.

Watch List Investments

Prodesa

As of March 31, 2018, the Company’s investment in Corporacion Prodesa S.R.L. (“Prodesa”) is comprised of two senior secured term loan participations with an aggregate balance of $3,210,000 and $1,750,000 due under a senior secured purchase order revolving credit facility. The Company has been working with Prodesa to re-align its operations since 2015, starting with a senior secured purchase order revolving credit facility. The purchase order facility is secured by specific purchase orders from customers of Prodesa, as well as pledges of additional unencumbered assets and all shares of Prodesa. A number of draws and repayments have occurred under this facility. For example, during the year ended December 31, 2016, the Company funded seven additional draws under the purchase order facility for an aggregate of $1,750,000.

On January 31, 2017, the Company entered into a series of loan amendments with Prodesa. First, the $2,000,000 term loan facility with an original maturity date of July 15, 2016 was amended to increase the commitment to $3,540,000 to finance the acquisition of additional machinery and equipment and refinance existing property. As part of the amendment, the loan facility also extended the maturity date to July 28, 2021, and amended the interest rate on the $3,540,000 loan to 12.00% per annum, reflecting the increased and improved collateral supporting the loan facility. Separately, the Company simultaneously entered into amendments for the $750,000 inventory loan facility and the $1,750,000 purchase order facility to extend those facilities to mature concurrently with the amended term loan facility above, as each facility is cross-defaulted and cross-collateralized. The $750,000 inventory loan, with an original maturity date February 15, 2015 and previously extended to December 22, 2016, now matures on July 28, 2021. The $1,750,000 purchase order facility, with an original maximum term of December 31, 2020, now matures on July 28, 2021.

The Company has estimated the fair value of the Prodesa loans as of March 31, 2018 at $4,960,000 based on the income valuation approach as further described in Note 4 to the financial statements.

Usivale

the next 3 years). This extension was agreed to in exchange for a flat 0.5% extension fee on the outstanding balance and an increase in pledged contracts. The annual interest payment has been received in full.

As of March 31, 2018, the principal balance of the Usivale loans amounted to $2,851,296 and the Company has estimated the fair value of the Usivale loans at $2,851,296, which is based on a discounted cash flow analysis (income approach). As of March 31, 2018, accrued interest amounted to $105,340.

Fruit and Nut Distributor

Sesame Seed Exporter

Mac Z Group SARL

in the English courts ordering the borrower and the corporate guarantor to make payment in an amount to be determined. In parallel to the recovery plan with the borrower, a claim has been filed against the collateral manager under its professional indemnity insurance policy, which covers up to $40 million in loss.

Vicentin – Nacadie S.A.

As a short-term trade finance facility, Vicentin has historically been valued at cost. The remaining principal balance of $12,000,000 has been outstanding since March 2017. As IIG is seeking full repayment through its court action to secure assets from Vicentin, the Company believes, that as of March 31, 2018, the most appropriate valuation method is the liquidation approach. With the bond secured by IIG through the Commercial Court, whose value is for all principal and interest outstanding, there is sufficient collateral available to pay off the principal and accrued interest balances in full and the Company has determined the fair value of this investment should remain at $12,000,000.

Frigorifico Regional Industrias Alimentarias S.A. Sucursal Uruguay

As a short-term trade finance facility, FRIAR has historically been valued at cost. The remaining principal balance of $9,000,000 has been outstanding since July 2016. As IIG is seeking full repayment through its court action to secure assets from FRIAR, the Company believes the most appropriate valuation method is the liquidation approach. Until such time as full collateral coverage has been secured through the judicial proceeding, the Company has determined that the fair value of this investment should be $8,425,571 as of March 31, 2018.The Company placed the position on non-accrual status effective January 1, 2018.

Sancor Cooperativas Unidas

The Company has a trade finance position with Sancor Cooperativas Unidas (“Sancor”), an Argentinian company that distributes dairy products. As of March 31, 2018, the outstanding principal balance on this position was $6,000,000. Interest has been paid in full through March 31, 2018. Because Sancor did not make the required interest payments for the first and second quarters of 2017 on a timely basis, the sub-advisor began exercising pledged warrants to cover interest payments for 2017 and Q1 2018. The sub-advisor has worked with Sancor to restructure the existing loan and has extended the maturity to July 29, 2018, with an annual renewal option. It is anticipated a further extension will be agreed to as part of the restructuring. As part of the restructure, a co-borrower (Sancor Brazil) was added, additional collateral (face value of $56.6 million) was secured and key customers pay into the sub-advisor’s designated collection account. An unrelated loan from another lender of approximately $26 million was fully repaid by Sancor in the first quarter of 2017 and the release of the associated mortgage and reassignment of the collateral is in the final stages of being released and assigned to the Company. Ultimately, it is believed that Sancor will be sold and that all principal and interest due the Company will be paid upon this sale. Due to the uncertainty associated with the timing of such sale, the Company has determined that the fair value of this investment should be $5,790,732.

Functional Products Trading S.A.

Results of Operations

Consolidated operating results for the three months ended March 31, 2018 and 2017 are as follows:

	Three months ended
	March 31, 2018		March 31, 2017
Interest income	$	10,127,186	$	6,590,163
Interest from cash		54,548		87,922
Total investment income		10,181,734		6,678,085
Management fees		2,009,600		1,520,974
Incentive fees		1,403,506		960,348
Professional fees		326,435		365,179
General and administrative expenses		325,172		280,555
Interest expense		448,620		19,742
Board of managers fees		54,375		54,375
Total expenses		4,567,708		3,201,173
Expense support payment from Sponsor		-		(1,324,828	)
Net expenses		4,567,708		1,876,345
Net investment income	$	5,614,026	$	4,801,740

Revenues

For the three months ended March 31, 2018 and 2017, total investment income amounted to $10,181,734 and $6,678,085, respectively. Interest income increased by $3,537,023 during the three months ended March 31, 2018 from the same period in 2017 as a result of an increase in our weighted average investment portfolio of approximately $129,347 offset by a decrease in the weighted average yield of approximately 0.2% from a weighted average yield of 12.0% for the three months ended March 31, 2017 to approximately 11.8% for the three months ended March 31, 2018. The decrease in yield was primarily due to a change in our investments portfolio mix.

During the three months ended March 31, 2018, $6,915,058 or 68.3% of the interest income earned came from loan and trade finance participations and $3,212,128 or 31.7% came from direct loans. In addition, we earned $54,548 in interest income on our cash balances.

During the three months ended March 31, 2017, $5,699,044 or 86.5% of the interest income earned came from loan and trade finance participations and $891,119 or 13.5% came from direct loans. In addition, we earned $87,922 in interest income on our cash balances.

Expenses

Total operating expenses, excluding the management and incentive fees, incurred for the three months ended March 31, 2018 increased by $434,751 to $1,154,602 from $719,851 for the three months ended March 31, 2017. The increase was primarily due to the following: 1) an increase in interest expense of $428,878, which was attributable to the addition of leverage, 2) an increase in general and administrative expenses of $44,617, and 3) offset by a decrease in professional fees of $38,744. Our Sponsor did not assume responsibility for any of our operating expenses for the three months ended March 31, 2018 while $364,480 of expenses paid or incurred by the Company were assumed by our Sponsor under the Responsibility Agreement for the three months ended March 31, 2017.

For the three months ended March 31, 2018 and 2017, the management fees amounted to $2,009,600 and $1,520,974, respectively. The incentive fees for the three months ended March 31, 2018 and 2017 amounted to $1,403,506 and $960,348,

respectively. None of the management fee for both periods ended March 31, 2018 and 2017 was assumed by our Sponsor under the Responsibility Agreement. In addition, for the three months ended March 31, 2017, the entire amounts of the incentive fees was assumed by the Sponsor under the Responsibility Agreement while none of the incentive fee for the three months ended March 31, 2018 was assumed by our Sponsor. The increases in both the management and incentive fees were due to our increase in net assets.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments. We measure net realized gains or losses by the difference between the net proceeds from the repayment or sale of an investment and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized. We had no realized gains or losses for the three months ended March 31, 2018 and 2017. We recorded a $849,503 unrealized loss for the three months ended March 31, 2018. We had no unrealized gains or losses for the three months ended March 31, 2017.

Changes in Net Assets from Operations. For the three months ended March 31, 2018, we recorded a net increase in net assets resulting from operations of $4,804,697, which consisted of net investment income, of $5,614,026, net change in unrealized depreciation on investments of $849,503 and foreign exchange gain of $40,174. For the three months ended March 31, 2017, we recorded a net increase in net assets resulting from operations, which consisted entirely of net investment income, of $4,801,740.

Financial Condition, Liquidity and Capital Resources

As of March 31, 2018, we had approximately $9 million in cash. We generate cash primarily from cash flows from private placements of our units, interest, dividends and fees earned from our investments and principal repayments, and proceeds from sales of our investments and from sales of promissory notes. We may also generate cash in the future from debt financing. Our primary use of cash will be to make loans, either directly or through participations, payments of our expenses, payments on our notes and any other borrowings, and cash distributions to our unitholders. We expect to maintain cash reserves from time to time for investment opportunities, working capital and distributions. From the beginning of the Company’s operations to date, our Sponsor has absorbed a significant portion of our operating expenses under the Responsibility Agreement in the amount of approximately $16.7 million. The Company may only reimburse the Sponsor for expenses covered under the Responsibility Agreement to the extent the Company’s investment income in any quarter, as reflected on the statement of operations, exceeds the sum of (a) total distributions to unitholders incurred during the quarter and (b) the Fund’s expenses as reflected on the statement of operations for the same quarter (the “Reimbursement Hurdle”). To the extent the Company is not successful in satisfying the Reimbursement Hurdle, no amount will be payable in that quarter by the Company for reimbursement to the Sponsor of the cumulative Company Expenses. The Company has not met the Reimbursement Hurdle for the quarter ended March 31, 2018. Thus, such amounts are not yet payable by the Company to the Sponsor. Following the end of the primary offering, which terminated on March 31, 2017, the Sponsor can demand the reimbursement of operating expenses covered by the Responsibility Agreement if it does not cause a drop in the net asset value per unit. Such reimbursements to the Sponsor would affect the amount of cash available to the Company to pay distributions and/or make investments.

Our Sponsor is under no obligation to continue to pay our operating expenses and, if our Sponsor does not absorb our operating expenses, the distributions we pay to our unitholders may need to be reduced. Our Sponsor determined not to pay for any operating expenses for the fourth quarter of 2017 and the first quarter of 2018. Commencing with distributions payable for the month of March 2018, our board of managers approved a decrease in our daily distribution rate from $0.00197808 to $0.00168675 per unit, per day (less the ongoing fees applicable to certain classes of units which reduce the amount of distributions paid to the applicable unitholders). If our Sponsor does not absorb our operating expenses in the future and we do not generate sufficient investment income to cover our operating expenses, the distributions we pay to our stockholders may need to be further reduced.

We may borrow funds to make investments. We have not decided to what extent going forward we will finance portfolio investments using debt or the specific form that any such financing would take, but we believe that obtaining financing is necessary for the Company to fully achieve its long term goals. We have been, and still are, actively seeking further financing through both development banks and several commercial banks. Accordingly, we cannot predict with certainty what terms any such financing would have or the costs we would incur in connection with any such arrangement. On October 14, 2016, TriLinc Global Impact Fund Cayman, Ltd. (“TGIFC”), a wholly owned subsidiary of the Company, issued $1.635 million in the first series of four issuances of notes pursuant to an ongoing private offering of senior secured promissory notes targeting $100 million. On February 17, 2017, TGIFC issued an additional $225,000 in the second series of notes under the private offering. As of March 31, 2018, we had raised $1.86 million in the note offering and $310,000 of such debt was outstanding after repayment of $1.55 million during 2017 and the first quarter of 2018. On July 3, 2017, TGIFC entered into a $10.5 million facility agreement with Micro, Small & Medium Enterprises Bonds S.A. as Lender and Symbiotics SA as Servicer (“Symbiotics Facility”). On November 2, 2017, TGIFC entered into

a second Facility Agreement to receive an additional $9.75 million in the second tranche of financing with MSMEB as Lender and Symbiotics SA as Servicer. On December 5, 2017, TGIFC received an additional $2.5 million under the second tranche of financing under the Symbiotics Facility. As of March 31, 2018, TGIFC has $22.75 million total outstanding under the Symbiotics Facility and may request an additional $17.5 million, subject to the conditions precedent set forth in the second Facility Agreement, including availability of funding. For more information on this facility, please see “Notes to the Consolidated Financial Statements— Note 7. Notes Payable— Symbiotics Facility.” On August 7, 2017, TGIFC issued $5 million in the first of a Series 1 Senior Secured Promissory Notes private offering to State Street Australia Ltd ACF Christian Super. For more information on this note, please see “Notes to the Consolidated Financial Statements— Note 7. Notes Payable—Christian Super Promissory Note.” As of March 31, 2018, we have $28,060,000 in total debt outstanding with a debt to equity ratio of 7.6%.

Contractual Obligations and Commitments

The following table shows our payment obligations for repayment of debt, which represent our total contractual obligations as of March 31, 2018:

	Total		Less than 1 Year		1 - 3 Years		3- 5 years		More than 5 years
Notes payable	$	28,060,000	$	310,000	$	22,750,000	$	5,000,000	$	-
Total contractual obligations	$	28,060,000	$	310,000	$	22,750,000	$	5,000,000	$	-

We have included the following information related to commitments of the Company to further assist investors in understanding the Company’s outstanding commitments.

We have entered into certain contracts under which we have material future commitments. Our Advisory Agreement between us and the Advisor, dated as of February 25, 2014, had previously been renewed and is subject to an unlimited number of one-year renewals upon mutual consent of the Company and the Advisor. On February 14, 2018, our board of managers determined to extend our Advisory Agreement until February 25, 2019. The Advisor will serve as our advisor in accordance with the terms of our Advisory Agreement. Payments under our Advisory Agreement in each reporting period will consist of (i) an asset management fee equal to a percentage of the value of our gross assets, as defined in the agreement, and (ii) the reimbursement of certain expenses. Certain subordinated fees based on our performance are payable after our subordination is met.

If any of our contractual obligations discussed above are terminated, our costs may increase under any new agreements that we enter into as replacements. We would also likely incur expenses in locating alternative parties to provide the services we expect to receive under our Advisory Agreement.

Off-Balance Sheet Arrangements

Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not expect to have any off-balance sheet financings or liabilities. The Company reimburses organization and offering expenses to the Sponsor to the extent that the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0 % of the gross offering proceeds raised from the offering. As of March 31, 2018, there is a remaining balance of approximately $428,300 of offering costs that have not been reimbursed to the Sponsor.

Pursuant to the terms of the Responsibility Agreement between the Company, the Advisor and the Sponsor, the Sponsor has paid expenses on behalf of the Company through March 31, 2018 and may pay additional accrued operating expenses of the Company, which may not be reimbursable to the Sponsor if the Company does not satisfy the Reimbursement Hurdle. Such expenses will be expensed and payable by the Company in the period they become reimbursable and are estimated to be approximately $16.7 million through March 31, 2018.

Distributions

We have paid distributions commencing with the month beginning July 1, 2013, and we intend to continue to pay distributions on a monthly basis. From time to time, we may also pay interim distributions at the discretion of our board. Distributions are subject to the board of managers’ discretion and applicable legal restrictions and accordingly, there can be no assurance that we will make distributions at a specific rate or at all. Distributions are made on all classes of our units at the same time. The cash distributions received by our unitholders with respect to the Class C units, Class W units and certain Class I units, are and will continue to be lower than the cash distributions with respect to Class A and certain other Class I units because of the distribution fee relating to Class C units, the ongoing dealer manager fee relating to Class W units and Class I units issued pursuant to a private placement and the ongoing service fee relating to the Class W units, which are expenses specific to those classes of units. Amounts distributed to each

class are allocated among the unitholders in such class in proportion to their units. Distributions are paid in cash or reinvested in units, for those unitholders participating in the DRP. For the three months ended March 31, 2018, we paid a total of $7,103,800 in distributions, comprised of $4,401,276 paid in cash and $2,702,524 reinvested under our DRP.

The following table summarizes our distributions declared for 2018 and 2017, including the breakout between the distributions paid in cash and those reinvested pursuant to our DRP:

									Sources
Quarters ended	Amount per Unit		Cash Distributions		Distributions Reinvested		Total Declared		Cash Flows from Operating Activities		Cash Flows from Financing Activities
March 31, 2018	$	0.17377	$	4,401,276	$	2,702,524	$	7,103,800	$	4,401,276	$	—
Total for 2018			$	4,401,276	$	2,702,524	$	7,103,800	$	4,401,276	$	—

March 31, 2017	$	0.17377	$	3,060,697	$	2,505,036	$	5,565,733	$	3,060,697	$	—
June 30, 2017	$	0.17570		3,563,882		2,877,370		6,441,252		3,563,882		—
September 30, 2017	$	0.17570		3,720,660		2,939,388		6,660,048		3,720,660		—
December 31, 2017	$	0.17764		3,940,204		2,945,618		6,885,822		3,940,204		—
Total for 2017			$	14,285,443	$	11,267,412	$	25,552,855	$	14,285,443	$	—

Related Party Transactions

For the three months ended March 31, 2018 and 2017, the Sponsor assumed responsibility for $0 and $1,324,828 of the Company’s operating expenses, management fees and incentive fees, which are deferred under the Responsibility Agreement.

For the three months ended March 31, 2018 and 2017, the Advisor earned $2,009,600 and $1,520,974, respectively, in management fees and $1,403,506 and $960,348, respectively, in incentive fees.

Since the inception of the Company through March 31, 2018, pursuant to the terms of the Responsibility Agreement, the Sponsor has paid approximately $12,422,100 of operating expenses, management fees, and incentive fees on behalf of the Company and will pay or reimburse to the Company an additional $4,238,700 of expenses, which have been accrued by the Sponsor as of March 31, 2018. Such expenses, in the aggregate of $16,660,800 since the Company’s inception, may be expensed and payable by the Company to the Sponsor only if the Company satisfies the Reimbursement Hurdle.

For the three months ended March 31, 2018 and 2017, the Company paid $6,252 and $625,676, respectively, in dealer manager fees and $19,270 and $2,426,442, respectively, in selling commissions to the Company’s dealer manager, SC Distributors, LLC. All of the selling commissions and the dealer manager fees paid during the three months ended March 31, 2018 were paid in connection with a private placement of the Company’s units. These fees and commissions were paid in connection with the sales of the Company’s units to investors and, as such, were recorded against the proceeds from the issuance of units and are not reflected in the Company’s consolidated statement of operations.

Legal Proceedings

The Company is not party to any material legal proceedings.

Subsequent Events

Distributions

On April 10, 2018, with the authorization of the Company’s board of managers, the Company declared distributions for all classes of units for the period from April 1 through April 30, 2018. These distributions were calculated based on unitholders of record for each day in an amount equal to $0.00168675 per unit per day (less the distribution fee with respect to Class C units, an ongoing dealer manager fee with respect to certain Class I units and Class W units and an ongoing service fee with respect to Class W units).

On May 1, 2018, $1,384,035 of these distributions were paid in cash and on April 30, 2018, $800,072 were reinvested in units for those unitholders participating in the DRP.

On May 8, 2018, with the authorization of the Company’s board of managers, the Company declared distributions for all classes of units for the period from May 1 through May 31, 2018. These distributions will be calculated based on unitholders of record for each day in an amount equal to $0.00168675 per unit per day (less the distribution fee with respect to Class C units, an ongoing dealer manager fee with respect to certain Class I units and Class W units and an ongoing service fee with respect to Class W units). These distributions will be paid in cash or reinvested in units, for those unitholders participating in the DRP on or about June 1, 2018.

Investments

Subsequent to March 31, 2018 through May 10, 2018, the Company funded approximately $28.8 million in new trade finance participations and received proceeds from repayment of trade finance participations of approximately $37.2 million.

Critical Accounting Policies and Use of Estimates

The following discussion addresses the accounting policies that we utilize based on our current operations. Our most critical accounting policies involve decisions and assessments that could affect our reported assets and liabilities, as well as our reported revenues and expenses. We believe that all of the decisions and assessments upon which our financial statements are based are reasonable at the time made and based upon information available to us at that time. Our critical accounting policies and accounting estimates will be expanded over time as we continue to implement our business and operating strategy. In addition to the discussion below, we also describe our critical accounting policies in the notes to our financial statements.

Basis of Presentation

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties.

Although we were organized and conduct our business in a manner so that we are not required to register as an investment company under the Investment Company Act of 1940, as amended, our financial statements are prepared using the specialized accounting principles of the FASB ASC Topic 946, Financial Services — Investment Companies. Overall, we believe that the use of investment company accounting makes our financial statements more useful to investors and other financial statement users since it allows a more appropriate basis of comparison to other entities with similar objectives.

Valuation of Investments

Our board of managers has established procedures for the valuation of our investment portfolio in accordance with ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. As defined in ASC 820, fair value is the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

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Level 2 — Valuations based on inputs other than quoted prices included in Level 1, which are either directly or indirectly observable.

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approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples. The information may also include pricing information or broker quotes that include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.

The inputs used in the determination of fair value may require significant judgment or estimation.

Investments for which market quotations are readily available are valued at those quotations. Most of our investments are private investments in companies whose securities are not actively traded in the market and for which quotations are not be available. For those investments for which market quotations are not readily available, or when such market quotations are deemed by the Advisor not to represent fair value, our board of managers has approved a multi-step valuation process to be followed each fiscal quarter, as described below:

Each investment is valued by the Advisor in collaboration with the relevant sub-advisor;

For all investments with a stated maturity of greater than 12 months, we have engaged Duff & Phelps, LLC (“Duff & Phelps”) to conduct a review on the reasonableness of our internal estimates of fair value on each asset on a quarterly rotating basis, with each of such investments being reviewed at least annually, and provide an opinion that the Advisor’s estimate of fair value for each investment is reasonable;

The audit committee of our board of managers reviews and discusses the preliminary valuation prepared by the Advisor and any opinion rendered by Duff & Phelps; and

Our board of managers discusses the valuations and determine the fair value of each investment in our portfolio in good faith based on the input of the Advisor, Duff & Phelps and the audit committee. Our board of managers is ultimately responsible for the determination, in good faith, of the fair value of each investment.

Below is a description of factors that our board of managers may consider when valuing our investments.

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Macro-economic factors that are relevant to the investment or the underlying obligor

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Industry factors that are relevant to the investment or the underlying obligor

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Historical and projected financial performance of the obligor based on most recent financial statements

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Borrower draw requests and payment track record

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Loan covenants, duration and drivers

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Performance and condition of the collateral (nature, type and value) that supports the investment

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Sub-Advisor recommendation as to possible impairment or reserve, including updates and feedback

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For participations, the Company’s ownership percentage of the overall facility

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Key inputs and assumptions that are believed to be most appropriate for the investment and the approach utilized

We may also look to private merger and acquisition statistics, public trading multiples discounted for illiquidity and other factors, valuations implied by third-party investments in the portfolio companies or industry practices in determining fair value. We may also consider the size and scope of a portfolio company and its specific strengths and weaknesses, as well as any other factors we deem relevant in measuring the fair values of our investments.

Revenue Recognition

We record interest income on an accrual basis to the extent that we expect to collect such amounts. We do not accrue as a receivable interest on loans for accounting purposes if there is reason to doubt the ability to collect such interest. Structuring, upfront and similar fees are recorded as a discount on investments purchased and are accreted into interest income, on a straight line basis, which we have determined not to be materially different from the effective yield method.

We record prepayment fees for loans and debt securities paid back to us prior to the maturity date as income upon receipt.

We generally place loans on non-accrual status when principal and interest are past due 90 days or more or when there is a reasonable doubt that we will collect principal or interest. If, however, management believes the principal and interest will be collected, a loan may be left on accrual status during the period the Company is pursuing repayment of the loan. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment of the financial condition of the borrower. Non-accrual loans are generally restored to accrual status when past due principal and interest is paid and, in the Advisor’s judgment, is likely to remain current over the remainder of the term. At March 31, 2018, four portfolio companies were on non-accrual status with an aggregate fair value of $17,958,155 or 4.7% of the fair value of the Company’s total investments. At December 31, 2017, three portfolio companies were on non-accrual status with an aggregate fair value of $8,958,155 or 2.7% of the fair value of the Company’s total investments. Interest income not recorded relative to the original terms of the companies on non-accrual status as of March 31, 2018 amounted to approximately $522,471 for the three months ended March 31, 2018.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments

We measure net realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, including unamortized upfront fees and prepayment penalties. Realized gains or losses on the disposition of an investment are calculated using the first in first out (FIFO) method, utilizing the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Payment-in-Kind Interest

We may have investments that contain a payment-in-kind, or PIK, interest provision. For loans with contractual PIK interest, any interest will be added to the principal balance of such investments and be recorded as income, if the valuation indicates that such interest is collectible.

Distribution and Ongoing Dealer Manager Fees

We pay a distribution fee equal to 0.8% per annum of our current estimated value per share for each Class C unit sold in the Offering or pursuant to a private placement. In addition, we pay an ongoing dealer manager fee for each Class I unit sold pursuant to a private placement. Further, we pay an ongoing dealer manager fee and service fee for each Class W unit sold pursuant to the private placement. The aggregate amount of underwriting compensation for each public and private offering of the Class A, Class C, Class I, Class W, Class Y and Class Z units, including any applicable distribution fees, ongoing dealer manager fees and service fees, cannot exceed the Financial Industry Regulatory Authority’s 10% cap on underwriting compensation. The distribution fees, ongoing dealer manager fees, and service fees are not paid at the time of purchase. Such fees are payable monthly in arrears, as they become contractually due.

In prior periods, we had been recording distribution fees as a periodic charge to equity as they are incurred. Starting in June 2016, we determined to account for the distribution fees as a charge to equity at the time each Class C unit is sold in its Offering and record a corresponding liability for the estimated amount to be paid in future periods. We account for the ongoing dealer manager and services fees paid in connection with the sale of Class W and I units in the private placement in the same manner. At March 31, 2018, the estimated unpaid aggregate distribution fee and the unpaid dealer manager fee amounted to $1,677,000.

Organization and Offering Expenses

The Sponsor has incurred organization and offering costs on our behalf. Organization and offering costs are reimbursable to the Sponsor to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0% of the gross offering proceeds (the “O&O Reimbursement Limit”) raised from the Offering and will be accrued and payable by us only to the extent that such costs do not exceed the O&O Reimbursement Limit. Reimbursement of organization and offering costs that exceed the O&O Reimbursement Limit will be expensed in the period they become reimbursable, which is dependent on the gross offering proceeds raised in such period, and are therefore not included on the Statements of Assets and Liabilities as of March 31, 2018 and 2017. These expense reimbursements are subject to regulatory caps and approval by our board of managers. Reimbursements to the Sponsor are included as a reduction to net assets on the Consolidated Statement of Changes in Net Assets. Based on the proceeds raised in the Offering at the end of the primary offering, the organization and offering expenses equaled to 4.7% of the gross proceeds. As a result of the termination of the primary offering, effective March 31, 2017, we no longer pay the dealer manager selling commissions and dealer manager fees under a dealer manager agreement relating to the Offering. We will continue to incur certain organization and offering costs associated with the Distribution Reinvestment Plan and ongoing distribution fees on Class C units. In addition, the Sponsor has and may continue to incur organization and offering costs on behalf of the Company in connection with private placements of the Company’s units and the Company will pay selling commissions, dealer manager fees and ongoing distribution, dealer manager, and service fees to the dealer manager for certain sales pursuant to a private placement. As of March 31, 2018 the Sponsor has incurred $510,657 in organization and offering costs on our behalf related to a private placement of our units. As of March 31, 2018, we have reimbursed $82,289 of the organization and offering incurred relating to such private placement and have no obligation to reimburse the Sponsor for the remainder.

Expense Responsibility Agreement

On March 26, 2018, the Company, the Advisor and the Sponsor entered into an Amended and Restated Operating Expense Responsibility Agreement (“Responsibility Agreement”) originally effective as of June 11, 2013 and covering expenses through December 31, 2017. Since the inception of the Company through December 31, 2017, pursuant to the terms of the Responsibility Agreement, the Sponsor has paid approximately $12,347,400 of operating expenses, management fees, and incentive fees on behalf of the Company and will pay or reimburse to the Company an additional $4,313,400 of expenses, which have been accrued by the Sponsor as of December 31, 2017. The Sponsor will only be entitled to reimbursement of the cumulative Company expenses to the extent the Fund’s investment income in any quarter, as reflected on the statement of operations, exceeds the sum of (a) total distributions to unitholders incurred during the quarter and (b) the Fund’s expenses as reflected on the statement of operations for the same quarter (the “Reimbursement Hurdle”). If the Sponsor is entitled to receive reimbursement for any given quarter because the Company’s investment income exceeds the Reimbursement Hurdle for such quarter, we will apply the excess amount (the “Excess Amount”) as follows: (i) first, we will reimburse the Sponsor for all expenses, other than management fees and incentive fees, that the Sponsor previously paid on our behalf, which will generally consist of operating expenses (the “Previously Paid Operating Expenses”) until all Previously Paid Operating Expenses incurred to date have been reimbursed; and (ii) second, we will apply 50% of the Excess Amount remaining after the payment of Previously Paid Operating Expenses to reimburse the Sponsor for the management fees and incentive fees that the Sponsor has agreed to pay on our behalf until all such management fees and incentive fees accrued to date have been reimbursed. The Company has not met the Reimbursement Hurdle for the quarter ended March 31, 2018. Therefore, expenses of the Company covered by the Responsibility Agreement have not been recorded as expenses of the Company as of March 31, 2018. In accordance with ASC 450, Contingencies, such expenses will be accrued and payable by the Company in the period that they become both probable and estimable. The Sponsor may demand the reimbursement of cumulative Company expenses covered by the Responsibility Agreement to the extent the Company exceeds the Reimbursement Hurdle during any quarter.

Income Taxes

We believe we are properly characterized as a partnership for U.S. federal income tax purposes, and expect to continue to qualify as a partnership (and not be treated as a publicly traded partnership or otherwise be treated as a taxable corporation) for such purposes. As a partnership, we are generally not subject to U.S. federal income tax at the entity level.

Calculation of Net Asset Value

periods, the Company deducted the liability for the estimated future distribution fees in the Company’s net asset value calculation for Class C units. As a result, for each period from June 30, 2016 through March 31, 2017, the Class A and Class I units had a higher net asset value per unit than Class C units with the difference being the result of the future distribution fee deduction for Class C units. The Company has determined that such approach is not the most appropriate for determining net asset value per share for Class C units and, beginning with the net asset value determination as of June 30, 2017, the Company does not deduct the liability for estimated future distribution fees in its calculation of net asset value per share for Class C units. Further, the Company does not deduct the liability for estimated future dealer manager fees in its calculation of the net asset value per unit for Class I units and Class W units. Likewise, the Company does not deduct the liability for estimated future service fees in its calculation of the net asset value per unit for Class W units. The Company believes this approach is consistent with the industry standard and is more appropriate since the Company intends for the net asset value to reflect the estimated value on the date that the Company determines its net asset value. Accordingly, the Company believes that its estimated net asset value at any given time should not include consideration of any estimated future distribution fees that may become payable after such date. As a result of this change in the calculation of the net asset value, as of March 31, 2018, each of the Class A, Class C and Class I units have the same net asset value per unit of $8.421. As of March 31, 2017, Class A and Class I units had a net asset value of $8.529 per unit and Class C units had a net asset value of $8.267 (with a blended net asset value of $8.467 per unit). The increase in the net asset value per Class C unit from $8.267 as of March 31, 2017 to $8.421 as of March 31, 2018 is solely as a result of the change in the treatment of future distribution fees in the net asset value calculation discussed above and is not reflective of any increase in the value of the Company’s assets. Without taking into account the change in the treatment of the future distribution fees, the net asset value per unit has decreased by $0.108 from $8.529 as of March 31, 2017 to $8.421 as of March 31, 2018 as a result of the Sponsor’s determination to absorb a reduced amount of operating expenses during the second and fourth quarters of 2017. In addition, the Company failed to realize sufficient investment income during the second and fourth quarters of 2017 to cover operating expenses.

Recently Issued Accounting Pronouncements

Under the Jumpstart Our Business Startups Act (the “JOBS Act”), emerging growth companies can delay the adoption of new or revised accounting standards until such time as those standards apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates. There are no new or revised accounting standards that we have not adopted.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40).” ASU 2014-15 addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Management has adopted this guidance effective for the fourth quarter of 2016.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).” ASU 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 addresses eight classification issues related to the statement of cash flows: (i) debt prepayment or debt extinguishment, (ii) settlement of zero-coupon bonds, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method invitees, (vii) beneficial interest in securitizations transactions and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted this guidance, which did not have any effect on its consolidated financial statements, effective January 1, 2018.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. Our investments are currently structured with both fixed and floating interest rates. Those structured with floating rates are referenced to LIBOR and incorporate fixed interest rate floors. If rates go down, interest income will not decrease from current levels. To the extent that interest rates go up substantially, these investments will accrue higher amounts of income than currently being realized. Returns on investments that carry fixed rates are not subject to fluctuations in interest rates, and will not adjust should rates move up or down.

To the extent that we borrow money to make investments, our net investment income will be dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of rising interest rates, our cost of funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

Although we operate in a number of foreign markets, all investments are currently denominated in U.S. Dollars. Therefore, the current portfolio does not present currency risk to U.S. unitholders. In the future, we may hedge against interest rate and currency exchange rate fluctuations by using standard hedging instruments such as futures, options and forward contracts. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.

Item 4. Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q and determined that the disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings.

There are no pending material legal proceedings to which the Company or any of our Subsidiaries or any of our property is subject.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on April 2, 2018 (“2017 Form 10-K”), which could materially affect our business, financial condition, and/or future results. The risks described in our 2017 Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended March 31, 2018, we sold an aggregate of 6,092,066 units of Class A, Class C, Class I, Class W, Class Y and Class Z units to accredited investors for an aggregate amount of $51,860,500 pursuant to a private placement. SC Distributors, LLC served as the dealer manager in connection with the private placement. The units were issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), for transactions not involving a public offering.

Unit Repurchase Program

Beginning June 11, 2014, we commenced a unit repurchase program pursuant to which we conduct quarterly unit repurchases of up to 5% of our weighted average number of outstanding units in any 12-month period to allow our unitholders, who have held our units for a minimum of one year, to sell their units back to us at a price equal to the then current offering price less the sales fees associated with that class of units. Our unit repurchase program includes numerous restrictions, including a one-year holding period, that limit our unitholders’ ability to sell their units. Unless our board of managers determines otherwise, we will limit the number of units to be repurchased during any calendar year to the number of units we can repurchase with the proceeds we receive from the sale of units under our distribution reinvestment plan. At the sole discretion of our board of managers, we may also use cash on hand, cash available from borrowings and cash from liquidation of investments as of the end of the applicable quarter to repurchase units.

On November 11, 2014, our board of managers amended our unit repurchase program to provide for the repurchases to be made on the last calendar day of the quarter rather than the last business day of the quarter. On March 3, 2017, the board of managers authorized an amendment to the unit repurchase program and commencing with redemption requests processed at the end of the second quarter of 2017, units were redeemed at a price equal to the greater of $9.025 or the estimated net asset per unit for each class of units, as most recently disclosed by us in a public filing with the SEC. Our March 7, 2018, the board authorized a further amendment to our unit repurchase program and commencing with repurchase requests processed on the last day of the first quarter of 2018, units are redeemed at a price equal to the estimated net asset value per unit for each class of units, as most recently disclosed by us in a public filing with the SEC. Redemptions for the first quarter of 2018 were redeemed at the price equal to $8.507 for Class A units, Class C units, Class I units and Class Y unit, which was the net asset value per unit of each class as of September 30, 2017, the most recently disclosed net asset value at the time of redemption. Redemptions for the second quarter of 2018 will be redeemed at a price equal to $8.466 per Class A unit, Class C units, Class I unit and Class Y units, which was the net asset value per unit of each class as of December 31, 2017.

Our board of managers has the right to amend, suspend or terminate the unit repurchase program to the extent that it determines that it is in our best interest to do so. We will promptly notify our unitholders of any changes to the unit repurchase program, including any amendment, suspension or termination of it in our periodic or current reports or by means of other notice. Moreover, the unit repurchase program will terminate on the date that our units are listed on a national securities exchange, are included for quotation in a national securities market or, in the sole determination of our board of managers, a secondary trading market for the units otherwise develops.

During the three months ended March 31, 2018, we fulfilled the following requests pursuant to our unit repurchase program:

Period	Total Number of Units Purchased		Average Price Paid Per Unit		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Units that May Yet be Purchased Under the Program
1/01/2018 - 1/31/2018		238,568	$	9.025		238,568		304,970
2/01/2018 - 2/28/2018		—		—		—		304,970
3/01/2018 - 3/31/2018		—		—		—		304,970
Total		238,568	$	9.025		238,568

During the three months ended March 31, 2018, we repurchased 238,568 units for a total of $2,153,077. In addition, as of March 31, 2018, there were 84 repurchase requests for a total of 392,497 units that were pending which were processed by the Company on April 11, 2018 at a price of $8.507 per unit.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

Number		Description

3.1		Certificate of Formation of TriLinc Global Impact Fund, LLC. Incorporated by reference to Exhibit 3.1 to the Draft Registration Statement on Form S-1 (File No. 377-00015) filed with the Securities and Exchange Commission (the “SEC”) on November 1, 2012.

3.2		Fifth Amended and Restated Limited Liability Company Operating Agreement dated January 20, 2018. Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on January 25, 2018.

4.1		Third Amended and Restated Distribution Reinvestment Plan. Incorporated by reference to Exhibit 4.1 to the Form 8-K filed with the SEC on March 09, 2018.

4.2		Third Amended and Restated Unit Repurchase Program. Incorporated by reference to Exhibit 4.2 D to the Form 8-K filed with the SEC on March 09, 2018.

10.1		Second Amended and Restated Advisory Agreement between TriLinc Advisors, LLC and TriLinc Global Impact Fund, LLC, dated February 25, 2018. Incorporated by reference to Exhibit 10.1to the Form 10-K filed with the SEC on April 2, 2018.

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.

31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.

32.1*		Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following materials from TriLinc Global Impact Fund LLC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed on May 14, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Assets and Liabilities, (ii) Consolidated Statement of Operations, (iii) Consolidated Statement of Changes in Net Assets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Schedules of Investments and (vi) Notes to the Consolidated Financial Statements.

*	Filed herewith

SIGNATURES

Pursuant to the requirements 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.

	TRILINC GLOBAL IMPACT FUND, LLC.

May 14, 2018	By:	/s/ Gloria S. Nelund
		Gloria S. Nelund
		Chief Executive Officer

May 14, 2018	By:	/s/ Brent L. VanNorman
		Brent L. VanNorman
		Chief Financial Officer

TriLinc Global Impact Fund LLC - FORM 10-Q - May 14, 2018

Attached files

TriLinc Global Impact Fund LLC Reports