Hancock Park Corporate Income, Inc. - FORM 10-Q

Attached files

file	filename
EX-32.2 - EX-32.2 - Hancock Park Corporate Income, Inc.	hpci2021q2ex32-2.htm
EX-32.1 - EX-32.1 - Hancock Park Corporate Income, Inc.	hpci2021q2ex32-1.htm
EX-31.2 - EX-31.2 - Hancock Park Corporate Income, Inc.	hpci2021q2ex31-2.htm
EX-31.1 - EX-31.1 - Hancock Park Corporate Income, Inc.	hpci2021q2ex31-1.htm
EX-14.1 - EX-14.1 - Hancock Park Corporate Income, Inc.	hpcicodeofethicsex141.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended June 30, 2021


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

For the transition period from _______ to _______

Commission file number 814-01185

Hancock Park Corporate Income, Inc.

(Exact name of registrant as specified in its charter)


Maryland		81-0850535
State or Other Jurisdiction of		I.R.S. Employer Identification No.
Incorporation or Organization

10 S. Wacker Drive, Suite 2500, Chicago, Illinois		60606
Address of Principal Executive Offices		Zip Code

	(847) 734-2000
Registrant’s Telephone Number, Including Area Code

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

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


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ¨ No ¨

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


Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	x	Smaller reporting company	¨

Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

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

Yes ¨ No x

The number of shares of the issuer’s common stock, $0.001 par value, outstanding as of August 12, 2021 was 2,107,953.

HANCOCK PARK CORPORATE INCOME, INC.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
	Consolidated Statements of Assets and Liabilities as of June 30, 2021 (unaudited), and December 31, 2020	3
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 (unaudited) and 2020 (unaudited)	4
	Consolidated Statements of Changes in Net Assets for the Three and Six Months Ended June 30, 2021 (unaudited) and 2020 (unaudited)	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 (unaudited) and 2020 (unaudited)	7
	Consolidated Schedules of Investments as of June 30, 2021 (unaudited) and December 31, 2020	8
	Notes to Consolidated Financial Statements (unaudited)	20
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 4.	Controls and Procedures	55

PART II. OTHER INFORMATION		56
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 3.	Defaults Upon Senior Securities	58
Item 4.	Mine Safety Disclosures	58
Item 5.	Other Information	58
Item 6.	Exhibits	59
SIGNATURES		60

Defined Terms

We have used "we," "us," "our," "our company," and "the Company" to refer to Hancock Park Corporate Income, Inc. in this report. We also have used several other terms in this report, which are explained or defined below:


Term			Explanation or Definition
1940 Act			Investment Company Act of 1940, as amended
Administration Agreement			Administration agreement between the Company and OFS Services, dated July 15, 2016
Advisers Act			The Investment Advisers Act of 1940, as amended
Advisors			OFS Advisor and CIM Capital
Advisory Agreements			The Investment Advisory Agreement and Sub-Advisory Agreement
Affiliated Account			An account, other than the Company, managed by OFS Advisor or an affiliate of OFS Advisor
Affiliated Fund			Certain other funds, including other BDCs and registered investment companies managed by OFS Advisor
ASC			Accounting Standards Codification, as issued by the FASB
ASU			Accounting Standards Updates, as issued by the FASB
BDC			Business Development Company under the 1940 Act
BLA			Business Loan Agreement, with Pacific Western Bank, as lender, which provides the Company with a senior secured revolving credit facility
Board			The Company's board of directors
CCO			CCO Capital, LLC, a Delaware limited liability company and the Company's dealer manager
CIM Capital			CIM Capital IC Management, LLC, an affiliate of OFS Advisor
CLO			Collateralized Loan Obligation
Code			Internal Revenue Code of 1986, as amended
Company			Hancock Park Corporate Income, Inc. and its consolidated subsidiaries
Contractual Issuer Expenses			Salaries and direct expenses of OFS Advisor’s employees, employees of their affiliates and others while engaged in offering and other contractually-defined activities
Dealer Manager Agreement			Broker dealer management agreement dated August 3, 2020 by and among the Company, OFS Advisor, International Assets Advisory, LLC and CCO, as amended, supplemented or modified
EBITDA			Earnings before interest, taxes, depreciation, and amortization
ESAs			The Prior Expense Support Agreement and Expense Support Agreement
Exchange Act			Securities Exchange Act of 1934, as amended
Expense Support Agreement			Amended and Restated Expense Support and Conditional Reimbursement Agreement, dated as of August 3, 2020, by and among the Company, OFS Advisor and CIM Capital
FASB			Financial Accounting Standards Board

Funding I			OFS Funding I, LLC, a wholly-owned subsidiary of OFSAM and an affiliate of OFS Advisor
GAAP			Accounting principles generally accepted in the United States
HPCI-MB			HPCI-MB, Inc., a wholly owned subsidiary taxed under subchapter C of the Code and generally holds the equity investments of the Company that are taxed as pass-through entities
ICTI			Investment company taxable income, which is generally net ordinary income plus net short-term capital gains in excess of net long-term capital losses
Indicative Prices			Market quotations, prices from pricing services or bids from brokers or dealers
Investment Advisory Agreement			Investment advisory and management agreement between the Company and OFS Advisor, dated July 15, 2016
IRS			Internal Revenue Service
LIBOR			London Interbank Offered Rate

Net Loan Fees			The cumulative amount of fees, such as origination fees, discounts, premiums and amendment fees that are deferred and recognized as income over the life of the loan


Term			Explanation or Definition
OCCI			OFS Credit Company, Inc., a Delaware corporation and a non-diversified, closed-end management investment company for whom OFS Advisor serves as investment adviser
Offering			Continuous offering of up to $200,000,000 of shares of the Company's common stock
OFS Advisor			OFS Capital Management, LLC, a wholly-owned subsidiary of OFSAM and registered investment advisor under the Advisers Act

OFS Capital			OFS Capital Corporation, a Delaware corporation and publicly-traded BDC for whom OFS Advisor serves as investment advisor
OFS Services			OFS Capital Services, LLC, a wholly-owned subsidiary of OFSAM and affiliate of OFS Advisor
OFSAM			Orchard First Source Asset Management, LLC, a full-service provider of capital and leveraged finance solutions to U.S. corporations
Order			An exemptive relief order from the SEC to permit us to co-invest in portfolio companies with Affiliated Funds in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions
PIK			Payment-in-kind, non-cash interest or dividends payable as an addition to the loan or equity security producing the income
Portfolio Company Investment			A debt or equity investment in a portfolio company. Portfolio Company Investments exclude Structured Finance Notes
Prime Rate			United States Prime interest rate
Prior Expense Support Agreement			Expense support and conditional reimbursement agreement dated July 15, 2016, between the Company and OFS Advisor
PWB Credit Facility			Senior secured revolving credit facility between the Company and Pacific Western Bank, as lender
Reunderwriting Analysis			A discount rate method based upon a hypothetical recapitalization of the entity given its current operating performance and current market condition
RIC			Regulated investment company under the Code
SEC			U.S. Securities and Exchange Commission
Securities Act			Securities Act of 1933, as amended
Structured Finance Notes			CLO mezzanine debt, CLO subordinated debt and CLO loan accumulation facility positions
Sub-Advisory Agreement			Sub-Advisory Agreement dated as of August 3, 2020, by and between OFS Advisor and CIM Capital
Synthetic Rating Analysis			A discount rate method that assigns a surrogate debt rating to the entity based on known industry standards for assigning such ratings and then estimates the discount rate based on observed market yields for actual rated debt
Transaction Price			The cost of an arm's length transaction occurring in the same security
Unsecured Note			An agreement with the HCM Master Fund Limited, an exempted company incorporated with limited liability under the laws of the Cayman Island in which the Company sold in a private placement an unsecured note in an aggregate principal amount of $15,000,000

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "would," "should," "targets," "projects," and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

•our ability and experience operating a BDC or maintaining our qualification as a RIC under the Code;

•our dependence on key personnel;

•our ability to maintain or develop referral relationships;

•the ability of OFS Advisor, to identify, invest in and monitor companies that meet our investment criteria;

•the belief that the carrying amounts of our financial instruments, such as cash, receivables and payables approximate the fair value of such items due to the short maturity of such instruments and that such financial instruments are held with high credit quality institutions to mitigate the risk of loss due to credit risk;

•actual and potential conflicts of interest with OFS Advisor and other affiliates of OFSAM;

•constraint on investments due to access to material nonpublic information;

•restrictions on our ability to enter into transactions with our affiliates;

•the use of borrowed money to finance a portion of our investments, including the belief that our long-dated financing facilities affords us operational flexibility;

•our ability to incur additional leverage pursuant to Section 61(a)(2) of the 1940 Act and the impact of such leverage on our net investment income and results of operations;

•competition for investment opportunities;

•the percentage of investments that bear interest on a floating rate or fixed rate basis;

•the impact of inflation rates on our business prospects and the prospects of our portfolio companies;

•the impact of any new tax legislation on our investments, our stockholders, and our business;

•our ability to raise debt or equity capital as a BDC;

•the timing, form and amount of any distributions from our portfolio companies;

•the impact of a protracted decline in the liquidity of credit markets on our business;

•interest rate volatility, including the decommissioning of LIBOR;

•the general economy and its impact on the industries in which we invest;

•changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including with respect to changes from the impact of the coronavirus (“COVID-19”) pandemic; the length and duration of the COVID-19 pandemic in the United States as well as worldwide and the magnitude of the economic impact of the pandemic; the effect of the COVID-19 pandemic on our business, financial condition, results of operations and cash flows and those of our portfolio companies (including the expectation that a shift from cash interest to PIK interest will result from concessions granted to borrowers due to the COVID-19 pandemic), including our and their ability to achieve our respective objectives; the effect of the disruptions caused by the COVID-19 pandemic, including those caused by variants of the virus, on our ability to continue to effectively manage our business and on the availability of equity and debt capital and our use of borrowed money to finance a portion of our investments;

•the belief that we have sufficient levels of liquidity to support our existing portfolio companies and deploy capital in new investment opportunities;

•uncertain valuations of our Portfolio Company Investments, including our belief that reverting back to an equal weighting of the Reunderwriting Analysis method and Synthetic Rating Analysis method more accurately captures certain data related to the observed return of market liquidity and the historic correlative relationship between these markets; and

•the effect of new or modified laws or regulations governing our operations.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include, among others, those described or identified in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020 and in "Part II, Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and this Quarter Report on Form 10-Q. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q.

We have based the forward-looking statements on information available to us on the date of this Quarterly Report on Form 10-Q. Except as required by the federal securities laws, 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 with the SEC in the future, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The forward-looking statements and projections contained in this Quarterly Report on Form 10-Q are excluded from the safe harbor protection provided by Section 21E of the Exchange Act.

The following should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Quarterly Report on Form 10-Q.

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Hancock Park Corporate Income, Inc.

Consolidated Statements of Assets and Liabilities


	June 30, 2021		December 31, 2020
	(unaudited)
Assets:
Non-control/non-affiliate investments (amortized cost of $43,197,839 and $46,226,581, respectively)	$	42,906,963	$	45,314,688
Cash	3,925,147		3,012,833
Interest receivable	125,666		164,222
Due from sub-adviser (see Note 3)	470,197		659,003
Prepaid expenses and other assets	12,126		6,676
Total assets	$	47,440,099	$	49,157,422

Liabilities:
Revolving line of credit	$	—	$	4,775,000
Unsecured note (net of discount and deferred debt issuance costs of $244,800 and $285,765, respectively)	14,755,200		14,714,235
Payable for investments purchased	3,300,830		—
Due to advisor and affiliates (see Note 3)	480,994		589,318
Accrued professional fees	279,466		161,842
Payable for repurchase of common stock	700,354		700,935
Distribution payable	542,808		549,197
Other liabilities	229,620		225,020
Total liabilities	20,289,272		21,715,547

Commitments and contingencies (see Notes 3 and 6)

Net assets:
Common stock, par value of $0.001 per share; 20,000,000 shares authorized, 2,107,953 and 2,178,920 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively	2,108		2,179
Paid-in capital in excess of par	28,137,649		29,042,554
Total distributable earnings (losses)	(988,930)		(1,602,858)
Total net assets	27,150,827		27,441,875

Total liabilities and net assets	$	47,440,099	$	49,157,422

Number of shares outstanding	2,107,953		2,178,920
Net asset value per share	$	12.88	$	12.59

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Statements of Operations (unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Investment income
Interest income	$	1,187,008	$	1,025,471	$	2,417,939	$	2,138,765
Fee income	116,110		20,577		150,429		79,002
Total investment income	1,303,118		1,046,048		2,568,368		2,217,767

Operating expenses
Amortization of deferred offering costs	24,860		84,229		67,288		168,566
Contractual issuer expenses	—		—		—		536
Interest expense	320,866		332,434		628,816		633,026
Management fees	137,332		134,632		278,500		265,397
Incentive fees	48,495		65,427		117,259		141,477
Administrative fees	186,544		215,124		372,933		401,741
Professional fees	242,341		124,772		443,486		289,068
Insurance expense	28,840		23,798		55,784		48,709
Transfer agent fees	35,057		22,286		59,974		46,808
Other expenses	25,368		13,493		32,525		22,359
Total operating expenses	1,049,703		1,016,195		2,056,565		2,017,687
Less: Expense limitations under agreements with advisers (see Note 3)	(285,643)		(505,163)		(577,371)		(921,796)
Net operating expenses	764,060		511,032		1,479,194		1,095,891

Net investment income	539,058		535,016		1,089,174		1,121,876

Net realized and unrealized gain (loss) on investments
Net realized loss on investments	(4,095)		(16,148)		(2,476)		(589,997)
Net unrealized appreciation (depreciation) on investments, net of taxes	373,972		236,362		616,635		(1,694,527)
Net gain (loss) on investments	369,877		220,214		614,159		(2,284,524)

Net increase (decrease) in net assets resulting from operations	$	908,935	$	755,230	$	1,703,333	$	(1,162,648)

Net investment income per common share – basic and diluted	$	0.25	$	0.24	$	0.50	$	0.50
Net increase (decrease) in net assets resulting from operations per common share – basic and diluted	$	0.42	$	0.34	$	0.78	$	(0.52)
Distributions declared per common share	$	0.25	$	0.24	$	0.51	$	0.51
Basic and diluted weighted average shares outstanding	2,156,129		2,229,750		2,171,658		2,237,446

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Statements of Changes in Net Assets (unaudited)


	Common Stock
	Number of shares	Par value		Paid-in capital in excess of par		Total distributable earnings (losses)		Total net assets
Balances at January 1, 2020	2,239,774	$	2,240	$	29,786,761	$	(668,495)	$	29,120,506
Net investment income	—	—		—		1,121,876		1,121,876
Net realized loss on investment	—	—		—		(589,997)		(589,997)
Net unrealized depreciation on investments, net of taxes	—	—		—		(1,694,527)		(1,694,527)
Tax reclassifications of permanent differences	—	—		(7,185)		7,185		—
Common stock issued	34,788	34		439,958		—		439,992
Repurchase of common stock	(86,287)	(86)		(1,019,010)		—		(1,019,096)
Distributions to stockholders	—	—		—		(1,129,062)		(1,129,062)
Net decrease for the period ended June 30, 2020	(51,499)	(52)		(586,237)		(2,284,525)		(2,870,814)
Balances at June 30, 2020	2,188,275	$	2,188	$	29,200,524	$	(2,953,020)	$	26,249,692

Balances at March 31, 2020	2,250,747	$	2,251	$	29,928,550	$	(3,173,234)	$	26,757,567
Net investment income	—	—		—		535,016		535,016
Net realized loss on investment	—	—		—		(16,148)		(16,148)
Net unrealized appreciation on investments, net of taxes	—	—		—		236,362		236,362
Tax reclassifications of permanent differences	—	—		(4,785)		4,785		—
Common stock issued	23,815	23		295,769		—		295,792
Repurchase of common stock	(86,287)	(86)		(1,019,010)		—		(1,019,096)
Distributions to stockholders	—	—		—		(539,801)		(539,801)
Net increase (decrease) for the period ended June 30, 2020	(62,472)	(63)		(728,026)		220,214		(507,875)
Balances at June 30, 2020	2,188,275	$	2,188	$	29,200,524	$	(2,953,020)	$	26,249,692


	Common Stock
	Number of shares	Par value		Paid-in capital in excess of par		Total distributable earnings (losses)		Total net assets
Balances at January 1, 2021	2,178,920	$	2,179	$	29,042,554	$	(1,602,858)	$	27,441,875
Net investment income	—	—		—		1,089,174		1,089,174
Net realized loss on investment	—	—		—		(2,476)		(2,476)
Net unrealized appreciation on investments, net of taxes	—	—		—		616,635		616,635
Tax reclassifications of permanent differences	—	—		(8,250)		8,250		—
Common stock issued	39,426	39		511,861		—		511,900
Repurchase of common stock	(110,393)	(110)		(1,408,516)		—		(1,408,626)
Distributions to stockholders	—	—		—		(1,097,655)		(1,097,655)
Net increase (decrease) for the period ended June 30, 2021	(70,967)	(71)		(904,905)		613,928		(291,048)
Balances at June 30, 2021	2,107,953	$	2,108	$	28,137,649	$	(988,930)	$	27,150,827

Balances at March 31, 2021	2,200,627	$	2,200	$	29,319,933	$	(1,358,807)	$	27,963,326
Net investment income	—	—		—		539,058		539,058
Net realized loss on investment	—	—		—		(4,095)		(4,095)
Net unrealized appreciation on investments, net of taxes	—	—		—		373,972		373,972
Tax reclassifications of permanent differences	—	—		(3,750)		3,750		—
Common stock issued	17,719	19		229,981		—		230,000
Repurchase of common stock	(110,393)	(110)		(1,408,516)		—		(1,408,626)
Distributions to stockholders	—	—		—		(542,808)		(542,808)
Net increase (decrease) for the period ended June 30, 2021	(92,674)	(91)		(1,182,285)		369,877		(812,499)
Balances at June 30, 2021	2,107,953	$	2,108	$	28,137,649	$	(988,930)	$	27,150,827

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Statements of Cash Flows (unaudited)


	Six Months Ended June 30,
	2021		2020
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations	$	1,703,333	$	(1,162,648)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net unrealized (appreciation) depreciation on investments, net of taxes	(616,635)		1,694,527
Net realized losses on investments	2,476		589,997
Amortization of Net Loan Fees and discounts on investments	(314,587)		(32,982)
Amortization of deferred debt issuance costs	48,211		48,693
Accretion of interest income on Structured Finance Notes	(210,423)		—
Paid-in-kind interest and dividend income	(64,061)		(5,674)
Purchase of portfolio investments	(17,692,557)		(10,156,520)
Proceeds from principal payments on portfolio investments	20,182,750		3,852,820
Sale or redemption of portfolio investments	856,353		2,517,950
Proceeds from distributions received from structured finance notes	271,003		—
Changes in operating assets and liabilities:
Interest receivable	38,556		(89,507)
Due from sub-adviser	188,806		—
Due to advisor and affiliates	(108,324)		(35,722)
Receivable for investment sold	—		(130,179)
Payable for investments purchased	3,300,830		(4,316,624)
Other assets and liabilities	112,933		31,938
Net cash provided by (used in) operating activities	7,698,664		(7,193,931)

Cash flows from financing activities
Net proceeds from issuance of common stock	511,900		439,992
Distributions paid to stockholders	(1,104,043)		(1,173,174)
Borrowings under revolving line of credit	2,650,000		6,000,000
Repayments under revolving line of credit	(7,425,000)		(4,200,000)
Repurchase of common stock	(1,409,207)		(364,384)
Payment of debt issuance costs	(10,000)		(50,000)
Net cash provided by (used in) financing activities	(6,786,350)		652,434

Net increase (decrease) in cash	912,314		(6,541,497)
Cash at beginning of period	3,012,833		8,814,578
Cash at end of period	$	3,925,147	$	2,273,081

Supplemental disclosure of cash flow information:
Amortization of deferred offering costs limited by investment advisor (see Note 3)	$	67,288	$	168,566
Cash paid for interest	575,570		584,739

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2021


Portfolio Company (1)(8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Non-control/Non-affiliate Investments
Debt and Equity Investments
All Star Auto Lights, Inc.	Motor Vehicle Parts (Used) Merchant Wholesalers
Senior Secured Loan		9.00%	(L +8.00%)	12/19/2019	8/20/2024	$	3,495,112	$	3,455,016	$	3,495,115	13.0	%

A&A Transfer, LLC	Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers
Senior Secured Loan		7.75%	(L +6.50%)	2/7/2020	2/7/2025	1,800,492		1,780,950		1,793,478		6.6
Senior Secured Loan (Revolver) (12)		7.75%	(L +6.50%)	2/7/2020	2/7/2025	47,461		44,039		47,276		0.2
						1,847,953		1,824,989		1,840,754		6.8
Ball Metalpack	Metal Can Manufacturing
Senior Secured Loan		9.75%	(L +8.75%)	6/8/2021	7/31/2026	625,000		612,500		612,500		2.3

BayMark Health Services, Inc.	Outpatient Mental Health and Substance Abuse Centers
Senior Secured Loan		9.50%	(L +8.50%)	6/10/2021	6/11/2028	1,325,758		1,305,949		1,302,110		4.8
Senior Secured Loan (Delayed Draw) (12)		n/m (5)	(L +8.50%)	6/10/2021	6/11/2028	—		(9,904)		(11,824)		—
						1,325,758		1,296,045		1,290,287		4.8
Chemical Resources Holdings, Inc.	Custom Compounding of Purchased Resins
Senior Secured Loan (6)		8.77%	(L +7.27%)	1/25/2019	1/25/2024	1,256,850		1,248,148		1,276,289		4.7
Common Equity (168 units) (7) (13)				1/25/2019				166,469		312,078		1.1
						1,256,850		1,414,617		1,588,367		5.8
Constellis Holdings, LLC	Other Justice, Public Order, and Safety Activities
Senior Secured Loan		12.00%	(L +11.00%)	3/27/2020	3/27/2025	3,522		3,132		3,547		—
Common Equity (1,362 units) (7)				3/27/2020				46,403		22,590		0.1
						3,522		49,535		26,138		0.1

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2021


Portfolio Company (1)(8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Convergint Technologies Holdings, LLC	Security Systems Services (except Locksmiths)
Senior Secured Loan (9)		4.50%	(L +3.75%)	3/18/2021	3/18/2028	$	281,512	$	280,152	$	283,037	1.0	%
Senior Secured Loan		7.50%	(L +6.75%)	9/28/2018	3/18/2029	2,999,911		2,991,966		3,040,333		11.2
Senior Secured Loan (Delayed Draw) (12) (9)		4.50%	(L +3.75%)	4/6/2021	3/31/2028	44,806		44,806		45,049		0.2
						3,326,229		3,316,924		3,368,420		12.4
DRS Imaging Services, LLC	Data Processing, Hosting, and Related Services
Common Equity (115 units) (7) (13)				3/8/2018				115,154		154,074		0.6

Eblens Holdings, Inc.	Shoe Store
Subordinated Loan (2)		12.00% cash / 1.00% PIK	N/A	7/13/2017	1/13/2023	482,098		477,197		444,117		1.6
Common Equity (3,750 units) (7)				7/13/2017				37,500		5,981		—
						482,098		514,697		450,098		1.6
Electrical Components International, Inc.	Current-Carrying Wiring Device Manufacturing
Senior Secured Loan		8.62%	(L +8.50%)	4/8/2021	6/26/2026	1,000,000		871,484		871,484		3.2

Excelin Home Health, LLC	Home Health Care Services
Senior Secured Loan		11.50%	(L +9.50%)	10/25/2018	4/25/2024	1,000,000		989,756		1,000,000		3.7

Inergex Holdings, LLC	Other Computer Related Services
Senior Secured Loan		8.00% cash / 1.00% PIK	(L +8.00%)	10/1/2018	10/1/2024	1,017,348		1,006,106		1,017,348		3.7
Senior Secured Loan (Revolver) (12)		n/m (5)	(L +7.00%)	10/1/2018	10/1/2024	—		(1,016)		—		—
						1,017,348		1,005,089		1,017,348		3.7
I&I Sales Group, LLC	Marketing Consulting Services
Senior Secured Loan		9.50%	(L +8.50%)	12/30/2020	7/10/2025	992,500		977,054		992,604		3.7
Senior Secured Loan (Revolver) (12)		n/m (5)	(L +8.50%)	12/30/2020	7/10/2025	—		(456)		3		—
						992,500		976,598		992,607		3.7

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2021


Portfolio Company (1)(8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Milrose Consultants, LLC	Administrative Management and General Management Consulting Services
Senior Secured Loan (6)		7.60%	(L +6.60%)	7/16/2019	7/16/2025	$	3,925,926	$	3,896,416	$	4,004,444	14.7	%

Online Tech Stores, LLC (10)	Stationery and Office Supplies Merchant Wholesalers
Subordinated Loan		10.50% cash / 3.0% PIK	N/A	2/1/2018	8/1/2023	1,238,926		1,009,132		5,882		—

Pelican Products, Inc.	Unlaminated Plastics Profile Shape Manufacturing
Senior Secured Loan		8.75%	(L +7.75%)	9/24/2018	5/1/2026	2,100,000		2,105,002		2,100,000		7.7

Professional Pipe Holdings, LLC	Plumbing, Heating, and Air-Conditioning Contractors
Senior Secured Loan		9.75% cash / 1.50% PIK	(L +10.25%)	3/23/2018	3/23/2023	348,008		344,965		334,421		1.2
Common Equity (86 units) (7)				3/23/2018				85,714		51,448		0.2
						348,008		430,679		385,869		1.4
Resource Label Group, LLC	Commercial Printing (except Screen and Books)
Senior Secured Loan		5.50%	(L +4.50%)	6/7/2017	5/26/2023	66,901		66,688		66,833		0.2
Senior Secured Loan		9.50%	(L +8.50%)	6/7/2017	11/26/2023	178,571		177,576		178,571		0.7
						245,472		244,264		245,404		0.9
RPLF Holdings, LLC	Software Publishers
Common Equity (45,890 units) (7) (13)				1/17/2018				88,917		142,923		0.5

RSA Security	Computer and Computer Peripheral Equipment and Software Merchant Wholesalers
Senior Secured Loan		8.50%	(L +7.75%)	4/16/2021	4/27/2029	635,556		627,810		627,810		2.3
Senior Secured Loan (Delayed Draw) (12)		n/m (5)	(L +7.75%)	4/16/2021	4/16/2029	—		—		(4,442)		—
						635,556		627,810		623,368		2.3

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2021


Portfolio Company (1)(8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
SourceHOV Tax, Inc.	Other Accounting Services
Senior Secured Loan		7.50%	(L +6.50%)	3/16/2020	3/16/2025	$	3,551,705	$	3,520,664	$	3,523,717	13.0	%
Senior Secured Loan (Revolver) (12)		n/m (5)	(L +6.50%)	5/17/2021	3/17/2025	—		(2,431)		(1,683)		—
						3,551,705		3,518,233		3,522,034		13.0
Spring Education Group, Inc. (F/K/A SSH Group Holdings, Inc.,)	Child Day Care Services
Senior Secured Loan		8.40%	(L +8.25%)	7/26/2018	7/30/2026	1,241,800		1,213,797		1,130,010		4.2

STS Operating, Inc.	Industrial Machinery and Equipment Merchant Wholesalers
Senior Secured Loan (9)		5.25%	(L +4.25%)	5/15/2018	12/11/2024	103,301		103,166		102,219		0.4
Senior Secured Loan		9.00%	(L +8.00%)	5/15/2018	4/30/2026	1,593,220		1,593,195		1,568,599		5.8
						1,696,521		1,696,361		1,670,818		6.2
The Escape Game, LLC	All other amusement and recreation industries
Senior Secured Loan		9.75%	(L +8.75%)	12/22/2017	12/22/2022	500,000		498,530		500,000		1.8
Senior Secured Loan		8.00%	(L +7.00%)	2/14/2020	12/31/2021	333,333		333,333		332,810		1.2
Senior Secured Loan		9.75%	(L +8.75%)	7/18/2019	12/22/2022	500,000		500,000		500,000		1.8
Senior Secured Loan (Delayed Draw)		9.75%	(L +8.75%)	7/20/2018	12/31/2021	166,667		166,667		166,667		0.6
						1,500,000		1,498,530		1,499,477		5.4
Thryv, Inc. (9)	Directory and Mailing List Publishers
Senior Secured Loan		9.50%	(L +8.50%)	2/18/2021	3/1/2026	1,157,143		1,128,492		1,175,588		4.3

TruGreen Limited Partnership	Landscaping Services
Senior Secured Loan		9.25%	(L +8.50%)	5/13/2021	11/2/2028	1,500,000		1,546,250		1,546,250		5.7

TTG Healthcare, LLC	Diagnostic Imaging Centers
Senior Secured Loan		8.50%	(L +7.50%)	3/1/2019	11/28/2025	1,617,228		1,601,668		1,626,049		6.0
Preferred Equity (191 Class B units) (7) (13)				3/1/2019				191,409		334,931		1.2
						1,617,228		1,793,077		1,960,980		7.2
Total Debt and Equity Investments						$	37,130,655	$	37,239,364	$	36,720,239	135.2	%

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2021


Portfolio Company (1)(8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets

Structured Finance Note Investments (11) (14) (15)
Apex Credit CLO 2020 Ltd.
Subordinated Notes (16)		13.26%		11/16/2020	11/19/2031	$	3,650,000	$3,053,226		$	3,140,840	11.6	%

Apex Credit CLO 2021 Ltd
Subordinated Notes (16)		14.53%		5/28/2021	7/18/2034	1,480,000		1,246,168		1,249,879		4.6

Monroe Capital MML CLO X, LTD.
Mezzanine bond - Class E		10.99%	(L +8.85%)	8/7/2020	8/20/2031	1,000,000		943,283		1,006,960		3.7

Regatta II Funding
Mezzanine bond - Class DR2		13.87%	(L +6.95%)	6/5/2020	1/15/2029	800,000		715,798		789,044		2.9

Total Structured Finance Note Investments						6,930,000		5,958,475		6,186,724		22.8

Total Investments						$	44,060,655	$	43,197,839	$	42,906,963	158.0	%

(1)Equity ownership may be held in shares or units of companies affiliated with the portfolio company. The Company's investments are generally classified as "restricted securities" as such term is defined under Rule 6-03(f) of Regulation S-X or Rule 144 of the Securities Act.

(2)The interest rate on these investments contains a PIK provision, whereby the issuer has the option to make interest payments in cash or with the issuance of additional securities as payment of the entire PIK provision. The interest rate in the schedule represents the current interest rate in effect for these investments. The following table provides additional details on these PIK investments, including the maximum annual PIK interest rate allowed as of June 30, 2021:

Portfolio Company

Investment Type

Range of PIK
Option

Range of Cash
Option

Maximum PIK
Rate Allowed

Eblens Holdings, Inc.

Subordinated Loan

0% or 1.00%

13.00% or 12.00%

1.00%

(3)Substantially all of the debt investments bear interest at rates determined by reference to LIBOR (L), and which are reset monthly or quarterly. For all variable-rate investments, the schedule presents the spread over LIBOR and the interest rate as of June 30, 2021. All investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(4)Unless otherwise noted with footnote 9, fair value was determined using significant unobservable inputs for all of the Company's investments and are considered Level 3 under GAAP. See Note 5 for further details.

(5)Not meaningful as there is no outstanding balance on the revolver or delayed draw. The Company earns unfunded commitment fees on undrawn revolving lines of credit balances, which are reported in fee income. The Company considers undrawn amounts in the determination of fair value on revolving lines of credit.

(6)The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The table below provides additional details as of June 30, 2021:


Portfolio Company	Reported Interest Rate	Interest Rate per Credit Agreement	Additional Interest per Annum
Chemical Resources Holdings, Inc.	8.77%	7.50%	1.27%
Milrose Consultants, LLC	7.60%	7.00%	0.60%

(7)Non-income producing.

(8)Investments pledged as collateral under the PWB Credit Facility.

(9)Fair value was determined by reference to observable inputs other than quoted prices in active markets and are considered Level 2 under GAAP. See Note 5 for further details.

(10)Investment was on non-accrual status as of June 30, 2021, meaning the Company has suspended recognition of all or a portion of income on the investment. See Note 4 for further details.

(11)Non-qualifying assets under Section 55(a) of the 1940 Act. As defined under Section 55 of the 1940 Act, qualifying assets must represent at least 70% of the Company's assets at the time of acquisition of any additional non-qualifying assets. As of June 30, 2021, approximately 87% of the Company's assets were qualifying assets.

(12) Subject to unfunded commitments. See Note 6 for further details.

(13) All or portion of investment held by HPCI-MB, a wholly owned subsidiary of the Company subject to corporate income tax.

(14) The rate disclosed is the estimated effective yield, generally established at purchase and re-evaluated upon receipt of distributions, and based upon projected amounts and timing of future distributions and the projected amount and timing of terminal principal payments at the time of estimation. The estimated yield and investment cost may ultimately not be realized. Maturity date represents the contractual maturity date of the Structured Finance Notes. Projected cash flows, including the projected amount and timing of terminal principal payments which may be projected to occur prior to contractual maturity date, were utilized in deriving the effective yield of the investments.

(15) Amortized cost reflects accretion of effective yield less any cash distributions received or entitled to be received from CLO subordinated debt investments.

(16) CLO subordinated debt positions are entitled to recurring distributions which are generally equal to the remaining cash flow of payments made by underlying securities less contractual payments to debt holders and fund expenses.

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2020


Portfolio Company (1) (8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Non-control/Non-affiliate Investments
All Star Auto Lights, Inc.	Motor Vehicle Parts (Used) Merchant Wholesalers
Senior Secured Loan		8.50%	(L +7.50%)	12/19/2019	8/20/2024	$	3,235,962	$	3,207,447	$	3,074,744	11.2	%

A&A Transfer, LLC	Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers
Senior Secured Loan		8.25%	(L +6.50%)	2/7/2020	2/7/2025	1,848,000		1,825,185		1,866,480		6.8
Senior Secured Loan (Revolver) (12)		n/m (5)	(L +6.50%)	2/7/2020	2/7/2025	—		(3,891)		(2,373)		—
						1,848,000		1,821,294		1,864,107		6.8
BayMark Health Services	Outpatient Mental Health and Substance Abuse Centers
Senior Secured Loan		9.25%	(L +8.25%)	3/22/2018	3/1/2025	1,000,000		994,006		1,000,000		3.6

Chemical Resources Holdings, Inc.	Custom Compounding of Purchased Resins
Senior Secured Loan (6)		9.17%	(L +7.67%)	1/25/2019	1/25/2024	1,256,850		1,246,469		1,256,850		4.6
Common Equity (168 units) (7) (13)				1/25/2019				166,469		314,000		1.1
						1,256,850		1,412,938		1,570,850		5.7
Confie Seguros Holdings II Co.	Insurance Agencies and Brokerages
Senior Secured Loan		8.73%	(L +8.50%)	6/6/2017	11/1/2025	1,447,640		1,405,677		1,391,331		5.1

Constellis Holdings, LLC	Other Justice, Public Order, and Safety Activities
Senior Secured Loan		8.50%	(L +7.50%)	3/27/2020	3/27/2024	2,650		2,650		2,650		—
Senior Secured Loan		12.00%	(L +11.00%)	3/27/2020	3/27/2025	3,522		3,080		3,593		—
Common Equity (1,362 units)				3/27/2020				46,403		34,036		0.1
						6,172		52,133		40,279		0.1
Convergint Technologies	Security Systems Services (except Locksmiths)
Senior Secured Loan		7.50%	(L +6.75%)	9/28/2018	2/2/2026	2,393,750		2,353,885		2,330,921		8.5

DRS Imaging Services, LLC	Data Processing, Hosting, and Related Services
Common Equity (115 units) (7) (13)				3/8/2018				115,154		178,000		0.6

DuPage Medical Group	Offices of Physicians, Mental Health Specialists
Senior Secured Loan (9)		3.50%	(L +2.75%)	8/22/2017	8/15/2024	96,100		95,851		95,640		0.3
Senior Secured Loan		7.75%	(L +7.00%)	8/22/2017	8/15/2025	1,939,435		1,935,728		1,939,435		7.1
						2,035,536		2,031,579		2,035,075		7.4

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2020


Portfolio Company (1) (8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Eblens Holdings, Inc.	Shoe Store
Subordinated Loan (2)		12.00% cash / 1.00% PIK	N/A	7/13/2017	1/13/2023	$	479,683	$	475,323	$	229,885	0.8	%
Common Equity (3,750 units) (7)				7/13/2017				37,500		—		—
						479,683		512,823		229,885		0.8
Excelin Home Health, LLC	Home Health Care Services
Senior Secured Loan		11.50%	(L +9.50%)	10/25/2018	4/25/2024	1,000,000		987,954		1,000,000		3.6

Hyland Software, Inc.	Software Publishers
Senior Secured Loan (9)		4.25%	(L +3.50%)	10/24/2018	7/1/2024	21,733		21,712		21,814		0.1
Senior Secured Loan		7.75%	(L +7.00%)	10/24/2018	7/7/2025	293,452		294,593		293,452		1.1
						315,185		316,305		315,267		1.2
Inergex Holdings	Other Computer Related Services
Senior Secured Loan		8.00%	(L +7.00%)	10/1/2018	10/1/2024	1,094,797		1,084,334		1,060,897		3.9
Senior Secured Loan (Revolver) (12)		n/m (5)	(L +7.00%)	10/1/2018	10/1/2024	—		(1,171)		—		—
						1,094,797		1,083,163		1,060,897		3.9
Institutional Shareholder Services Inc.	Administrative Management and General Management Consulting Services
Senior Secured Loan		8.75%	(L +8.50%)	3/4/2019	3/5/2027	1,068,750		1,043,966		1,068,750		3.9

I&I Sales Group, LLC	Marketing Consulting Services
Senior Secured Loan		9.50%	(L +8.50%)	12/30/2020	7/10/2025	1,000,000		982,521		982,521		3.6
Senior Secured Loan (Revolver) (12)		n/m (5)	(L +8.50%)	12/30/2020	7/10/2025	—		(512)		(512)		—
						1,000,000		982,009		982,009		3.6
Milrose Consultants, LLC	Administrative Management and General Management Consulting Services
Senior Secured Loan (6)		7.62%	(L +6.62%)	7/16/2019	7/16/2025	3,925,926		3,892,798		3,910,455		14.2

Online Tech Stores, LLC	Stationery and Office Supplies Merchant Wholesalers
Subordinated Secured Loan (10)		13.50% PIK	N/A	2/1/2018	8/1/2023	1,147,487		1,007,141		151,631		0.6

Parfums Holding Company, Inc.	Cosmetics, Beauty Supplies, and Perfume Stores
Senior Secured Loan		9.75%	(L +8.75%)	11/16/2017	6/30/2025	1,636,364		1,624,785		1,636,364		6.0

Pelican Products, Inc.	Unlaminated Plastics Profile Shape Manufacturing
Senior Secured Loan		8.75%	(L +7.75%)	9/24/2018	5/1/2026	2,000,000		2,007,100		1,979,900		7.2

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2020


Portfolio Company (1) (8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Professional Pipe Holdings, LLC	Plumbing, Heating, and Air-Conditioning Contractors
Senior Secured Loan		9.75% cash / 1.50% PIK	(L +8.75%)	3/23/2018	3/23/2023	$	379,552	$	375,340	$	368,870	1.3	%
Common Equity (86 units) (7)				3/23/2018				85,714		73,000		0.3
						379,552		461,054		441,870		1.6
Resource Label Group, LLC	Commercial Printing (except Screen and Books)
Senior Secured Loan		5.50%	(L +4.50%)	6/7/2017	5/26/2023	68,105		67,831		67,337		0.2
Senior Secured Loan		9.50%	(L +8.50%)	6/7/2017	11/26/2023	178,571		177,371		178,204		0.6
						246,676		245,202		245,540		0.8
Rocket Software, Inc.	Software Publishers
Senior Secured Loan		8.46%	(L +8.25%)	11/20/2018	11/28/2026	1,285,406		1,268,054		1,278,549		4.7

RPLF Holdings, LLC	Software Publishers
Common Equity (45,890 units) (7) (13)				1/17/2018				88,917		109,000		0.4

SourceHOV Tax, Inc.	Other Accounting Services
Senior Secured Loan (6)		7.61%	(L +6.11%)	3/16/2020	3/17/2025	3,552,124		3,525,944		3,569,555		13.0

Spring Education Group, Inc. (F/K/A SSH Group Holdings, Inc.)	Child Day Care Services
Senior Secured Loan		8.50%	(L +8.25%)	7/26/2018	7/30/2026	704,000		699,087		628,475		2.3

STS Operating, Inc.	Industrial Machinery and Equipment Merchant Wholesalers
Senior Secured Loan (9)		5.25%	(L +4.25%)	5/15/2018	12/11/2024	103,836		103,681		99,705		0.4
Senior Secured Loan		9.00%	(L +8.00%)	5/15/2018	4/30/2026	1,593,220		1,593,192		1,506,214		5.6
						1,697,056		1,696,873		1,605,919		6.0

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2020


Portfolio Company (1) (8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
The Escape Game, LLC	All other amusement and recreation industries
Senior Secured Loan		9.75%	(L +8.75%)	7/18/2019	12/22/2022	$	500,000	$	498,036	$	474,777	1.7	%
Senior Secured Loan		9.75%	(L +8.75%)	12/22/2017	12/31/2021	166,667		166,667		158,259		0.6
Senior Secured Loan		8.00%	(L +7.00%)	7/20/2018	12/31/2021	333,333		333,333		318,765		1.2
Senior Secured Loan (Delayed Draw)		9.75%	(L +8.75%)	7/20/2018	12/22/2022	500,000		500,000		474,777		1.7
						1,500,000		1,498,036		1,426,579		5.2
Truck Hero, Inc.	Truck Trailer Manufacturing
Senior Secured Loan (9)		3.90%	(L +3.75%)	5/30/2017	4/22/2024	15,826		15,750		15,829		0.1
Senior Secured Loan		9.25%	(L +8.25%)	5/30/2017	4/21/2025	1,878,456		1,821,347		1,878,456		6.8
						1,894,282		1,837,097		1,894,285		6.9
TTG Healthcare, LLC	Diagnostic Imaging Centers
Senior Secured Loan		8.50%	(L +7.50%)	3/1/2019	11/28/2025	1,625,354		1,609,224		1,619,283		5.9
Preferred Equity (191 units) (7) (13)				3/1/2019				191,409		338,000		1.2
						1,625,354		1,800,633		1,957,283		7.1
Wastebuilt Environmental Solutions, LLC.	Industrial Supplies Merchant Wholesalers
Senior Secured Loan		10.25%	(L +8.75%)	10/11/2018	10/11/2024	1,500,000		1,480,183		1,256,550		4.6

Xperi	Semiconductor and Related Device Manufacturing
Senior Secured Loan (9)		4.15%	(L +4.00%)	6/1/2020	6/1/2025	83,214		76,747		83,492		0.3

Total Debt and Equity Investments						$	41,359,765	$	41,529,984	$	40,317,562	146.9	%

Structured Finance Note Investments
Apex Credit CLO 2020
Subordinated Notes (16)		14.16% (14)		11/16/2020	11/19/2031 (11)	3,650,000		3,116,775 (15)		3,295,738		12.0

Monroe Capital MML CLO X, LTD.
Mezzanine bond - Class E		9.08%	(L +8.85%)	8/7/2020	8/20/2031 (11)	862,500		801,944		838,043		3.1

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2020


Portfolio Company (1) (8) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Park Avenue Institutional Advisers CLO 2017-1 – Class D
Mezzanine bond - Class D		6.44%	(L +6.22%)	6/5/2020	11/14/2029 (11)	$	100,000	$	82,564	$	95,269	0.3	%

Regatta II Funding – Class DR2
Mezzanine bond - Class DR2		7.19%	(L +6.95%)	6/5/2020	1/15/2029 (11)	800,000		695,314		768,076		2.8

Total Structured Finance Note Investments						$	5,412,500	$	4,696,597	$	4,997,126	18.2	%

Total Investments						$	46,772,265	$	46,226,581	$	45,314,688	165.1	%

(1) Equity ownership may be held in shares or units of companies affiliated with the portfolio company. The Company's investments are generally classified as "restricted securities" as such term is defined under Rule 6-03(f) of Regulation S-X or Rule 144 of the Securities Act.

(2) The interest rate on this investment contains a PIK provision, whereby the issuer has the option to make interest payments in cash or with the issuance of additional securities as payment of the entire PIK provision. The interest rate in the schedule represents the current interest rate in effect for this investment. The following table provides additional details on this PIK investment, including the maximum annual PIK interest rate allowed as of December 31, 2020:

Portfolio Company

Investment Type

Range of PIK
Option

Range of Cash
Option

Maximum PIK
Rate Allowed

Eblens Holdings, Inc.

Subordinated Loan

0% or 1.00%

13.00% or 12.00%

1.00%

(3) Substantially all of the investments that bear interest at a variable rate are indexed to LIBOR (L), generally between 0.75% and 1.0% at December 31, 2020, and reset monthly, quarterly, or semi-annually. Variable-rate loans with an aggregate cost of $39,315,954 include LIBOR reference rate floor provisions of generally 0.75% to 1.0% at December 31, 2020; the reference rate on such instruments was generally below the stated floor provisions. For each investment, the Company has provided the spread over the reference rate and current interest rate in effect at December 31, 2020. Unless otherwise noted, all investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.

(4) Unless otherwise noted with footnote 9, fair value was determined using significant unobservable inputs for all of the Company's investments and are considered Level 3 under GAAP. See Note 5 for further details.

(5) Not meaningful as there is no outstanding balance on the revolver. The Company earns unfunded commitment fees on undrawn revolving lines of credit balances, which are reported in fee income. The Company considers undrawn amounts in the determination of fair value on revolving lines of credit.

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2020

(6) The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The table below provides additional details as of December 31, 2020:


Portfolio Company	Reported Interest Rate	Interest Rate per Credit Agreement	Additional Interest per Annum
Chemical Resources Holdings, Inc.	9.17%	7.50%	1.67%
Milrose Consultants, LLC	7.62%	7.00%	0.62%
SourceHOV Tax, Inc.	7.61%	7.00%	0.61%

(7) Non-income producing.

(8) Investments pledged as collateral under the PWB Credit Facility.

(9) Fair value was determined by reference to observable inputs other than quoted prices in active markets and are considered Level 2 under GAAP. See Note 5 for further details.

(10) Investment was on non-accrual status as of December 31, 2020, meaning the Company has suspended recognition of all or a portion of income on the investment. See Note 4 for further details.

(11) Maturity date represents the contractual maturity date of the Structured Finance Notes. Projected cash flows, including the projected amount and timing of terminal principal payments which may be projected to occur prior to contractual maturity date, were utilized in deriving the effective yield of the investments.

(12) Subject to unfunded commitments. See Note 6 for further details.

(13) Investment held by HPCI-MB, a wholly owned subsidiary of the Company subject to corporate income tax.

(15) Amortized cost reflects accretion of effective yield less any cash distributions received or entitled to be received from CLO subordinated debt investments.

(16) CLO subordinated debt investments are entitled to recurring distributions which are generally equal to the remaining cash flow of payments made by underlying securities less contractual payments to debt holders and fund expenses.

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Note 1. Organization

The Company is a Maryland corporation formed on December 8, 2015 as an externally managed, non-diversified, closed-end investment company. The Company has elected to be regulated as a BDC and as a RIC under Subchapter M of the Code.

The Company’s objective is to provide stockholders with current income and capital appreciation primarily through debt investments and, to a lesser extent, equity investments primarily in middle-market companies located principally in the United States. OFS Advisor, an affiliate of the Company and a registered investment adviser, manages the day-to-day operations of, and provides investment advisory services to, the Company and, effective as of August 3, 2020, CIM Capital, an affiliate of the Company, OFS Advisor and CCO, and a registered investment adviser, serves as the Company's sub-adviser.

In addition, OFS Advisor serves as the investment adviser to OFS Capital, a publicly traded BDC with an investment strategy similar to that of the Company. OFS Advisor also serves as the investment adviser to OCCI, a non-diversified, externally managed, closed-end management investment company that is registered as an investment company under the 1940 Act and primarily invests in Structured Finance Notes. Additionally, OFS Advisor provides sub-advisory services to CMFT Securities Investments, LLC, a wholly owned subsidiary of CIM Real Estate Finance Trust, Inc., a corporation that qualifies as a real estate investment trust and CIM Real Assets & Credit Fund, an externally managed registered investment company that operates as an interval fund that invests primarily in a combination of real estate, credit and related investments.

The Company intends to raise up to $200,000,000 through offering shares of its common stock to investors in a continuous offering in reliance on exemptions from the registration requirements of the Securities Act. Through August 3, 2020, the Company and OFS Advisor were party to a dealer manager agreement (the "Prior Dealer Management Agreement") with International Asset Advisory, LLC ("IAA"). Placement activities were conducted by IAA and participating broker dealers who solicited subscriptions to purchase shares of the Company’s common stock.

On August 3, 2020, the Prior Dealer Manager Agreement was amended and restated to include CCO as an additional dealer manager for the Offering. From August 3, 2020 through August 31, 2020, CCO and IAA served as “co-dealer managers” and, effective September 1, 2020, IAA assigned and transferred all of IAA’s rights, obligations, interests and benefits under the Dealer Manager Agreement to CCO.

The Company may make investments through HPCI-MB, a wholly owned subsidiary taxed under subchapter C of the Code that generally holds the Company's equity investments in portfolio companies that are taxed as pass-through entities.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of presentation: The accompanying interim financial statements of the Company and related financial information have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and pursuant to ASC Topic 946, Financial Services–Investment Companies, the requirements for reporting on Form 10-Q, and Articles 6, 10 and 12 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting only of normal and recurring accruals and adjustments, necessary for fair presentation as of and for the periods presented. Certain amounts in the prior period financial statements have been reclassified to conform to the current year presentation. These financial statements and notes hereto should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10 K for the year ended December 31, 2020. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

Significant Accounting Policies: The following information supplements the description of significant accounting policies contained in Note 2 to the Company's financial statements included in the Company's Annual Report on Form 10 K for the year ended December 31, 2020.

Use of estimates: The preparation of financial statements in conformity 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 significantly from those estimates.

Concentration of credit risk: Aside from its debt instruments, including investments in Structured Finance Notes of CLOs, financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during the year, the Company may exceed the federally insured limits. The Company places cash deposits only with high credit quality institutions that it believes will mitigate the risk of loss due to credit risk. The amount of loss due to credit risk from debt investments, if borrowers completely fail to perform according to the terms of the

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

contracts, and the collateral or other security for those instruments proved to be of no value to the Company, is equal to the sum of the Company's recorded investment in debt instruments and the unfunded loan commitments disclosed in Note 6.

Note 3. Related Party Transactions

Investment Advisory and Management Agreement: OFS Advisor manages the day-to-day operations of, and provides investment advisory services to, the Company pursuant to an Investment Advisory Agreement, which became effective on August 30, 2016. Under the terms of the Investment Advisory Agreement, which are in accordance with the 1940 Act and subject to the overall supervision of the Board, OFS Advisor is responsible for sourcing potential investments, conducting research and diligence on potential investments and equity sponsors, analyzing investment opportunities, structuring investments, and monitoring investments and portfolio companies on an ongoing basis. OFS Advisor is a subsidiary of OFSAM and a registered investment advisor under the Advisers Act.

OFS Advisor receives fees for providing services, consisting of two components: a base management fee and an incentive fee. The base management fee is calculated at an annual rate of 1.25% and based on the average value of the Company’s total assets (other than cash, but including assets purchased with borrowed amounts and assets owned by any consolidated entity) at the end of the two most recently completed calendar quarters, adjusted for any share issuances or repurchases during the quarter.

The incentive fee has two parts. The first part ("Income Incentive Fee") is calculated and payable quarterly in arrears based on the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter. For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees such as commitment, origination and sourcing, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies, but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement and any interest expense and dividends paid on any outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest or dividend feature (such as OID, debt instruments with PIK interest, equity investments with accruing or PIK dividend and zero coupon securities), accrued income that the Company has not yet received in cash.

Pre-incentive fee net investment income is expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) at the end of the immediately preceding calendar quarter. The incentive fee with respect to pre-incentive fee net income is 100.0% of the amount, if any, by which the pre-incentive fee net investment income for the immediately preceding calendar quarter exceeds a 1.75% (which is 7.0% annualized) “hurdle rate” but is less than 2.1875% (or 8.75% annually), referred to as the “catch-up” provision, and 20.0% of the amount of pre-incentive fee net investment income, if any, that exceeds 2.1875%. The “catch-up” is meant to provide OFS Advisor with 20.0% of the pre-incentive fee net investment income as if a hurdle rate did not apply if this pre-incentive fee net investment income exceeds 2.1875% in any calendar quarter.

Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the incentive fee, it is possible that the Company may pay an incentive fee in a quarter in which the Company incurs a loss. For example, if the Company receives pre-incentive fee net investment income in excess of the quarterly minimum hurdle rate, the Company will pay the applicable incentive fee even if the Company has incurred a loss in that quarter due to realized and unrealized capital losses. The Company’s net investment income used to calculate this part of the incentive fee is also included in the amount of the Company’s gross assets used to calculate the base management fee. These calculations are appropriately prorated for any period of less than three months and adjusted for any share issuances or repurchases during such quarter.

The second part of the incentive fee (the “Capital Gain Fee”) will be determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and will equal 20.0% of the Company’s aggregate realized capital gains, if any, on a cumulative basis through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation through the end of such year, less all previous amounts paid in respect of the Capital Gain Fee.

The Company accrues the Capital Gain Fee if, on a cumulative basis, the sum of net realized capital gains and (losses) plus net unrealized appreciation and (depreciation) is positive. If, on a cumulative basis, the sum of net realized capital gains (losses) plus net unrealized appreciation (depreciation) decreases during a period, the Company will reverse any excess Capital Gain

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Fee previously accrued such that the amount of Capital Gains Fee accrued is no more than 20% of the sum of net realized capital gains (losses) plus net unrealized appreciation (depreciation).

The Investment Advisory Agreement was originally approved for a period of two years from August 30, 2016 to August 30, 2018 and, unless terminated earlier as described below, will remain in effect from year-to-year upon annual approval by the Board or by the affirmative vote of the holders of a majority of the Company’s outstanding voting securities, and, in either case, if also approved by a majority of the Company’s directors who are not “interested persons” as defined in the 1940 Act. On April 1, 2021, the Board approved the continuation of the Investment Advisory Agreement. The Investment Advisory Agreement will automatically terminate in the event of its assignment, as defined in the 1940 Act, and may be terminated by the Company or OFS Advisor without penalty upon not less than 60 days written notice to the other. The holders of a majority of our outstanding voting securities may also terminate the Investment Advisory Agreement without penalty upon not less than 60 days written notice.

Investment Sub-Advisory Agreement: CIM Capital serves as the Company’s sub-adviser pursuant to the Sub-Advisory Agreement, which became effective on August 3, 2020. Pursuant to the terms of the Sub-Advisory Agreement, CIM Capital evaluates and advises the Company on its private capital market strategy, including market trends and terms, provides financial and strategic planning advice and analysis, interprets market demand for products, assists in establishing the Company's operational readiness and selecting and negotiating engagements with third-party service providers, and coordinates the dissemination of customary information to interested parties.

Dealer Manager Agreement: Pursuant to the Dealer Manager Agreement, CCO, an affiliate of the Company, OFS Advisor and CIM Capital, provides certain sales, promotional and marketing services to the Company in connection with the Offering. The Company pays CCO an aggregate dealer manager fee of 3.0% of the gross proceeds from sales of the Offering.

Administration Agreement: OFS Services furnishes the Company with office facilities and equipment, necessary software licenses and subscriptions, and clerical, bookkeeping and record keeping services at such facilities pursuant to the Administration Agreement. Under the Administration Agreement, OFS Services performs, or oversees the performance of, the Company’s required administrative services, which include being responsible for the financial records that the Company is required to maintain and preparing reports to its stockholders and all other reports and materials required to be filed with the SEC or any other regulatory authority. In addition, OFS Services assists the Company in determining and publishing its net asset value, oversees the preparation and filing of its tax returns and the printing and dissemination of reports to its stockholders, and generally oversees the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Under the Administration Agreement, OFS Services also provides managerial assistance on the Company’s behalf to those portfolio companies that have accepted the Company’s offer to provide such assistance. Payment under the Administration Agreement is equal to an amount based upon the Company’s allocable portion of OFS Services’ overhead in performing its obligations under the Administration Agreement, including, but not limited to, rent, information technology services and the Company’s allocable portion of the cost of its officers, including its chief executive officer, chief financial officer, chief compliance officer, chief accounting officer, and their respective staffs. To the extent that OFS Services outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis without profit to OFS Services. Amounts charged under the Administration Agreement exclude Contractual Issuer Expenses.

Equity Ownership: As of June 30, 2021, affiliates of OFS Advisor held 74,084 shares of common stock, which is approximately 4% of the Company's outstanding shares of common stock.

Expenses recognized under agreements with the Advisors, CCO and OFS Services and distributions paid to affiliates for the three and six months ended June 30, 2021 and 2020 are presented below:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Base management fees	$	137,332	$	134,632	$	278,500	$	265,397
Incentive fees	48,495		65,427		117,259		141,477
Administration fees	186,544		215,124		372,933		401,741
Dealer manager fees	7,500		8,070		16,500		12,870
Reimbursements of organizational, offering and Contractual Issuer Expenses	3,750		4,785		8,250		7,185
Distributions paid to affiliates	18,803		18,069		37,605		37,516

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Expense Limitation Agreements: The Advisory Agreements and ESAs limit the Company's incurred expenses. The Advisory Agreements and the ESAs are substantively identical in their terms and conditions with respect to expense limitation support provided to the Company. Expense limitations prior to August 3, 2020, were provided by OFS Advisor and expense limitations on or after August 3, 2020, are provided by CIM Capital. Expense limitations provided under the Advisory Agreements and ESAs for the three and six months ended June 30, 2021 and 2020, are presented below:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net offering costs and Contractual Issuer Expenses limitations under the Advisory Agreements	$	21,110	$	79,445	$	59,038	$	161,918
Operating expense limitations under the ESAs	264,533		425,718		518,333		759,878
Net expense limitations under agreements with the Advisors	$	285,643	$	505,163	$	577,371	$	921,796

The Company is conditionally obligated to reimburse the Advisors for aggregate expense support provided of $4,316,186 and $4,570,949 at June 30, 2021 and December 31, 2020, respectively, as presented below:


	June 30, 2021		December 31, 2020
Unreimbursed costs under the Advisory Agreements:

Offering costs:
Unamortized as of period end	$	20,854	$	69,293
Amortized as of period end	546,680		572,063
Contractual Issuer Expenses	21,501		30,773
Total unreimbursed costs under the Advisory Agreements	589,035		672,129
Unreimbursed operating expense support under the ESAs	3,727,151		3,898,820
Total conditional reimbursement obligation under expense limitation agreements with the Advisors	$	4,316,186	$	4,570,949

Offering Costs and Contractual Issuer Expense Limitations: The Company is conditionally liable for offering costs and Contractual Issuer Expenses that the Advisors have incurred on its behalf under the terms of the Advisory Agreements. The Advisory Agreements entitle the Advisors to receive up to 1.5% of the gross proceeds raised in the Offering until all reimbursable offering costs and Contractual Issuer Expenses paid have been recovered. Offering expenses and Contractual Issuer Expenses incurred by the Advisors will be eligible for reimbursement for three years from the date incurred. Unreimbursed offering costs and Contractual Issuer Expenses subject to conditional reimbursement as of June 30, 2021, are summarized below:

Period incurred

Unreimbursed
Total

Expiration of reimbursement

eligibility (1)

Three months ended September 30, 2018

26,413

September 30, 2021

Three months ended December 31, 2018

23,452

December 31, 2021

Year ended December 31, 2019

305,436

December 31, 2022

Year ended December 31, 2020

217,356

December 31, 2023

Six months ended June 30, 2021

16,378

June 30, 2024

Total unreimbursed offering costs and Contractual Issuer Expenses

589,035

(1) Expenses are pooled monthly for the determination of their reimbursement expiration date and are summarized into quarterly and yearly pools for presentation purposes. Expirations of reimbursement eligibility for portions of each pool occurs at each month-end within the periods presented above.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Expense Support Agreement: Unreimbursed support for operating expenses provided under the ESAs and subject to conditional reimbursement as of June 30, 2021, is summarized below:


			Other Operating Expense Ratio
Supported period	Amount of expense limitation		Annualized for the quarter limitation was provided		Annual for year limitation was provided		Annualized rate of distribution per share (1)	Expiration of reimbursement eligibility
Three months ended September 30, 2018	$	275,339	6.9	%	7.2	%	7.0%	September 30, 2021
Three months ended December 31, 2018	188,188		5.3	%	7.2	%	7.0%	December 31, 2021
Three months ended March 31, 2019	272,547		6.1	%	5.5	%	7.0%	March 31, 2022
Three months ended June 30, 2019	238,847		5.7	%	5.5	%	7.0%	June 30, 2022
Three months ended September 30, 2019	231,737		5.1	%	5.5	%	7.1%	September 30, 2022
Three months ended December 31, 2019	385,544		4.9	%	5.5	%	7.2%	December 31, 2022
Three months ended March 31, 2020	334,160		5.9	%	6.2	%	7.2%	March 31, 2023
Three months ended June 30, 2020	425,718		6.1	%	6.2	%	7.2%	June 30, 2023
Three months ended September 30, 2020	452,480		6.7	%	6.2	%	7.2%	September 30, 2023
Three months ended December 31, 2020	404,258		6.6	%	6.2	%	7.2%	December 31, 2023
Three months ended March 31, 2021	253,800		6.5	%	n/m(2)		7.2%	March 31, 2024
Three months ended June 30, 2021	264,533		7.6	%	n/m(2)		7.1%	June 30, 2024
Total unreimbursed operating expense limitations provided under the ESAs	$	3,727,151

(1) The annualized rate of distributions per share is expressed as a percentage equal to the annualized distribution amount as of the end of the applicable period (which is calculated by annualizing the regular quarterly cash distribution per share as of such date without compounding), divided by our Offering price per share as of such date.

(2) Not meaningful. Annual Other Operating Expense Ratio upon which reimbursement is conditioned is based on the full-year results, and will not be determined until after December 31, 2021.

Amounts Due to OFS Advisor and its Affiliates: Amounts due to OFS Advisor and its affiliates of $480,994 and $589,318 reported in the consolidated statements of assets and liabilities as of June 30, 2021 and December 31, 2020, respectively, represent amounts payable under the Investment Advisory Agreement and Administration Agreement. Amount due from CIM Capital of $470,197 and $659,003 reported in the consolidated statements of assets and liabilities as of June 30, 2021 and December 31, 2020, respectively, represents amounts receivable under the Expense Support Agreement.

Note 4. Investments

As of June 30, 2021, the Company had loans to 25 portfolio companies, of which 99% were senior secured loans and 1% were subordinated loans, at fair value, as well as common and preferred equity investments in seven of these portfolio companies. The Company also held equity investments in two portfolio companies in which it did not hold a debt investment and four Structured Finance Note investments. At June 30, 2021, investments consisted of the following:


			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Senior secured debt investments (1)	$	35,021,469	81.1	%	128.9	%	$	35,246,215	82.2	%	129.8	%
Subordinated debt investments	1,486,329		3.4		5.5		449,999		1.0		1.7
Preferred equity investments	191,409		0.4		0.7		334,931		0.8		1.2
Common equity investments	540,157		1.3		2.0		689,094		1.6		2.5
Total debt and equity investments	37,239,364		86.2		137.1		36,720,239		85.6		135.2
Structured Finance Notes	5,958,475		13.8		21.9		6,186,724		14.4		22.8
Total investments	$	43,197,839	100.0	%	159.0	%	$	42,906,963	100.0	%	158.0	%

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

(1) Includes debt investments, typically referred to as unitranche, in which we have entered into contractual arrangements with co-lenders whereby, subject to certain conditions, we have agreed to receive our principal payments after the repayment of certain co‑lenders pursuant to a payment waterfall. Amortized cost and fair value of these investments were $5,144,564 and $5,280,733, respectively.

At June 30, 2021, all of the Company’s debt and equity investments were domiciled in the United States, while its Structured Finance Notes were domiciled in the Cayman Islands. Structured Finance Notes generally hold underlying portfolios of investments in companies domiciled in the United States of America. Geographic composition is determined by the location of the corporate headquarters of the portfolio company. The industry compositions of the Company’s portfolio were as follows:


			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Administrative and Support and Waste Management and Remediation Services

Security Systems Services (except Locksmiths)	$	3,316,924	7.6	%	12.2	%	$	3,368,422	8.0	%	12.4	%

Arts, Entertainment, and Recreation
All Other Amusement and Recreation Industries	1,498,530		3.5		5.5		1,499,477		3.5		5.5
Landscaping Services	1,546,250		3.6		5.7		1,546,250		3.6		5.7
Construction
Plumbing, Heating, and Air-Conditioning Contractors	430,679		1.0		1.6		385,869		0.9		1.4



Health Care and Social Assistance
Child Day Care Services	1,213,797		2.8		4.5		1,130,010		2.6		4.2
Diagnostic Imaging Centers	1,793,077		4.2		6.6		1,960,980		4.6		7.2
Home Health Care Services	989,756		2.3		3.6		1,000,000		2.3		3.7

Outpatient Mental Health and Substance Abuse Centers	1,296,045		3.0		4.8		1,290,286		3.0		4.8
Information
Data Processing, Hosting, and Related Services	115,154		0.3		0.4		154,074		0.4		0.6
Directory and Mailing List Publishers	1,128,492		2.6		4.2		1,175,588		2.7		4.3
Software Publishers	88,918		0.2		0.3		142,923		0.3		0.5
Manufacturing
Commercial Printing (except Screen and Books)	244,264		0.6		0.9		245,404		0.6		0.9
Current-Carrying Wiring Device Manufacturing	871,484		2.0		3.2		871,484		2.0		3.2
Custom Compounding of Purchased Resins	1,414,617		3.3		5.2		1,588,367		3.7		5.9
Metal Can Manufacturing	612,500		1.4		2.3		612,500		1.4		2.3



Unlaminated Plastics Profile Shape Manufacturing	2,105,002		4.9		7.8		2,100,000		4.9		7.7




Professional, Scientific, and Technical Services
Administrative Management and General Management Consulting Services	3,896,415		9.0		14.3		4,004,444		9.3		14.7

Marketing Consulting Services	976,598		2.3		3.6		992,607		2.3		3.7
Other Accounting Services	3,518,233		8.1		13.0		3,522,034		8.2		12.9
Other Computer Related Services	1,005,090		2.3		3.7		1,017,348		2.4		3.7

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements


			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Public Administration
Other Justice, Public Order, and Safety Activities	$	49,535	0.1	%	0.2	%	$	26,137	0.1	%	0.1	%
Retail Trade


Shoe Store	514,697		1.2		1.9		450,098		1.0		1.7



Wholesale Trade

Computer and Computer Peripheral Equipment and Software Merchant Wholesalers	627,810		1.5		2.3		623,368		1.5		2.3
Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers	1,824,989		4.2		6.7		1,840,754		4.3		6.8
Industrial Machinery and Equipment Merchant Wholesalers	1,696,361		3.9		6.2		1,670,818		3.9		6.2

Motor Vehicle Parts (Used) Merchant Wholesalers	3,455,015		8.0		12.7		3,495,115		8.1		12.8
Stationery and Office Supplies Merchant Wholesalers	1,009,132		2.3		3.7		5,882		—		—
Total debt and equity investments	$	37,239,364	86.2	%	137.1	%	$	36,720,239	85.6	%	135.2	%
Structured Finance Notes	5,958,475		13.8		21.9		6,186,724		14.4		22.8
Total investments	$	43,197,839	100.0	%	159.0	%	$	42,906,963	100.0	%	158.0	%

As of December 31, 2020, the Company had loans to 29 portfolio companies, of which 99% were senior secured loans and 1% were subordinated loans, at fair value, as well as equity investments in five of these portfolio companies. The Company also held equity investments in two portfolio companies in which it did not hold a debt investment and four investments in Structured Finance Notes. At December 31, 2020, the Company's investments consisted of the following:


			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Senior secured debt investments (1)	$	39,315,954	85.1	%	143.3	%	$	38,890,010	85.8	%	141.8	%
Subordinated debt investments	1,482,464		3.2		5.4		381,516		0.8		1.4
Preferred equity investments	191,409		0.4		0.7		338,000		0.7		1.2
Common equity investments	540,157		1.2		2.0		708,036		1.6		2.6
Total debt and equity investments	41,529,984		89.8		151.4		40,317,562		89.0		147.0
Structured Finance Notes	4,696,597		10.2		17.1		4,997,126		11.0		18.2
Total investments	$	46,226,581	100.0	%	168.5	%	$	45,314,688	100.0	%	165.2	%

(1) Includes debt investments in which we entered into contractual arrangements with co‑lenders whereby, subject to certain conditions, we agreed to receive our principal payments after the repayment of certain co‑lenders pursuant to a payment waterfall. Amortized cost and fair value of these investments were $8,665,211 and $8,736,860, respectively.

At December 31, 2020, all of the Company’s debt and equity investments were domiciled in the United States, while its Structured Finance Notes were domiciled in the Cayman Islands. Structured Finance Notes generally represent beneficial interests in underlying portfolios of investments in companies domiciled in the United States. Geographic composition is

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

determined by the location of the corporate headquarters of the portfolio company. The industry compositions of the Company’s portfolio were as follows:


			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Administrative and Support and Waste Management and Remediation Services
Security Systems Services (except Locksmiths)	$	2,353,885	5.1	%	8.6	%	$	2,330,921	5.1	%	8.5	%

Arts, Entertainment, and Recreation
All other amusement and recreation industries	1,498,036		3.2		5.5		1,426,579		3.1		5.2
Construction
Plumbing, Heating, and Air-Conditioning Contractors	461,054		1.0		1.7		441,870		1.0		1.6
Health Care and Social Assistance
Child Day Care Services	699,087		1.5		2.5		628,475		1.4		2.3
Diagnostic Imaging Centers	1,800,633		3.9		6.6		1,957,283		4.3		7.1
Home Health Care Services	987,954		2.1		3.6		1,000,000		2.2		3.6
Offices of Physicians, Mental Health Specialists	2,031,579		4.4		7.4		2,035,075		4.5		7.4
Outpatient Mental Health and Substance Abuse Centers	994,006		2.2		3.6		1,000,000		2.2		3.6
Industry
Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers	1,821,294		3.9		6.6		1,864,107		4.1		6.8
Information
Data Processing, Hosting, and Related Services	115,154		0.2		0.4		178,000		0.4		0.6
Software Publishers	1,673,276		3.6		6.1		1,702,816		3.8		6.2
Finance and Insurance

Insurance Agencies and Brokerages	1,405,677		3.0		5.1		1,391,331		3.1		5.1
Manufacturing
Commercial Printing (except Screen and Books)	245,202		0.5		0.9		245,540		0.5		0.9
Custom Compounding of Purchased Resins	1,412,938		3.1		5.1		1,570,850		3.5		5.7

Truck Trailer Manufacturing	1,837,097		4.0		6.7		1,894,285		4.2		6.9
Unlaminated Plastics Profile Shape Manufacturing	2,007,100		4.3		7.3		1,979,900		4.4		7.2
National industry
Marketing Consulting Services	982,009		2.1		3.6		982,009		2.2		3.6
Other Accounting Services	3,525,944		7.6		12.8		3,569,555		7.9		13.1
Semiconductor and Related Device Manufacturing	76,747		0.2		0.3		83,492		0.2		0.3




Professional, Scientific, and Technical Services
Administrative Management and General Management Consulting Services	4,936,764		10.8		18.1		4,979,205		11		18.2
Other Computer Related Services	1,083,163		2.3		3.9		1,060,897		2.3		3.9

Public Administration

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements


			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Other Justice, Public Order, and Safety Activities	$	52,133	0.1	%	0.2	%	$	40,279	0.1	%	0.1	%
Retail Trade
Cosmetics, Beauty Supplies, and Perfume Stores	1,624,785		3.5		5.9		1,636,364		3.6		6.0
Shoe Store	512,823		1.1		1.9		229,885		0.5		0.8



Wholesale Trade

Industrial Machinery and Equipment Merchant Wholesalers	1,696,873		3.7		6.2		1,605,919		3.5		5.9
Industrial Supplies Merchant Wholesalers	1,480,183		3.2		5.4		1,256,550		2.8		4.6
Motor Vehicle Parts (Used) Merchant Wholesalers	3,207,447		7.0		11.7		3,074,744		6.8		11.2
Stationery and Office Supplies Merchant Wholesalers	1,007,141		2.2		3.7		151,631		0.3		0.6
Total debt and equity investments	41,529,984		89.8		151.4		40,317,562		89.0		147.0
Structured Finance Notes	4,696,597		10.2		17.1		4,997,126		11.0		18.2
Total investments	$	46,226,581	100.0	%	168.5	%	$	45,314,688	100.0	%	165.2	%

When there is reasonable doubt that principal, cash interest, or PIK interest will be collected, loan investments are placed on non-accrual status and the Company will generally cease recognizing cash interest, PIK interest, or Net Loan Fee amortization, as applicable. Interest accruals and Net Loan Fee amortization are resumed on non-accrual investments only when they are brought current with respect to principal, interest and when, in the judgment of management, the investments are estimated to be fully collectible as to all principal. The amortized cost and fair value of the loan on non-accrual status with respect to all interest and Net Loan Fee amortization was $1,009,132 and $5,882, respectively, at June 30, 2021, and $1,007,141 and $151,631 respectively, at December 31, 2020.

On March 27, 2020, the Company's debt investments in Constellis Holdings, LLC were restructured, pursuant to which the Company converted its non-accrual debt investments into two new debt investments and 1,362 shares of common equity. The cost and fair value of debt investments received were $6,174 and $6,172, respectively, and the cost and fair value of the shares of common equity received were $46,403 and $46,410, respectively. The Company recognized a realized loss of $526,444 on the restructuring in 2020, which was fully recognized as an unrealized loss as of December 31, 2019.

Note 5. Fair Value of Financial Instruments

The Company’s investments are valued as determined by the Board. These fair values are determined in accordance with a documented valuation policy and a consistently applied valuation process.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values are determined with models or other valuation techniques, valuation inputs, and assumptions market participants would use in pricing an asset or liability. Valuation inputs are organized in a hierarchy that gives the highest priority to prices for identical assets or liabilities quoted in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of inputs in the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

Level 2: Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 2 inputs include: (i) quoted prices for similar assets or liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in markets that are not active, (iii) inputs other than quoted prices that are observable for the asset or liability and (iv) inputs that are derived principally from or corroborated by observable market data.

Level 3: Unobservable inputs for the asset or liability, and situations where there is little, if any, market activity for the asset or liability at the measurement date.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

The inputs into the determination of fair value are based upon the best information under the circumstances and may require significant judgment or estimation by management. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. The Company generally categorizes its investment portfolio into Level 2 and Level 3 of the hierarchy.

The Company assesses the levels of the investments at each measurement date, and transfers between levels are recognized on the measurement date. Senior securities with a fair value of $328,086 and $-0- were transferred from Level 3 to Level 2 during the three and six months ended June 30, 2021, respectively. Senior securities with a fair value of $1,614,176 and $-0-, respectively, were transferred from Level 3 to Level 2 during the three and six months ended June 30, 2020, and senior securities with a fair value of $14,726 and $-0-, respectively, were transferred from Level 2 to Level 3 during the three and six months ended June 30, 2020.

Due to the inherent uncertainty of determining the fair value of Level 3 investments, the fair value of the investments may differ significantly from the values that would have been used had a ready market or observable inputs existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions, or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company might realize significantly less than the value at which such investment had previously been recorded. The Company’s investments are subject to market risk, which is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

The following tables present the Company's investment portfolio measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020:


Security	Level 1		Level 2		Level 3		Fair Value at June 30, 2021
Debt investments	$	—	$	1,605,893	$	34,090,321	$	35,696,214
Equity investments	—		—		1,024,025		1,024,025
Structured Finance Notes	—		—		6,186,724		6,186,724
	$	—	$	1,605,893	$	41,301,070	$	42,906,963


Security	Level 1		Level 2		Level 3		Fair Value at December 31, 2020
Debt investments	$	—	$	316,480	$	38,954,956	$	39,271,436
Equity investments	—		—		1,046,036		1,046,036
Structured Finance Notes	—		—		4,997,216		4,997,216
	$	—	$	316,480	$	44,998,208	$	45,314,688

The following tables provide quantitative information about valuation techniques and the Company’s significant inputs to the Company’s Level 3 fair value measurements as of June 30, 2021 and December 31, 2020. In addition to the techniques and inputs noted in the tables below, according to the Company’s valuation policy, the Company may also use other valuation

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

techniques and methodologies when determining the Company’s fair value measurements. The tables below provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements.

Fair Value at June 30, 2021

Valuation techniques

Unobservable input

Range
(Weighted average)

Debt investments:

Senior secured

29,986,721

Discounted cash flow

Discount rates

5.76% - 14.74% (9.33%)

Senior secured

3,653,602

Market approach

Transaction Price

Subordinated

444,117

Discounted cash flow

Discount rates

20.69% - 20.69% (20.69%)

Subordinated

5,882

Market approach

EBITDA multiples

3.86x - 3.86x (3.86x)

Structured Finance Notes:

Subordinated Notes

4,390,719

Discounted cash flow

Discount rates(3)

8.00% - 13.50% (9.57%)

Constant Default Rate(1)

0.00% - 2.00% (1.43%)

Constant Default Rate(2)

2.00% - 2.00% (2.00%)

Recovery Rate

60.00% - 60.00% (60.00%)

Mezzanine debt

1,796,004

Discounted cash flow

Discount margin

7.25% - 8.70% (8.06%)

Constant Default Rate

2.00% - 3.00% (2.56%)

Recovery Rate

60.00% - 60.00% (60.00%)

Equity investments:

Preferred equity

334,931

Market approach

EBITDA multiples

6.50x - 6.50x (6.50x)

Common equity and warrants

689,094

Market approach

EBITDA multiples

3.75x - 12.27x (8.78x)

41,301,070

(1) Constant default rates for the next six months.

(2) Constant default rates following the next six months.

(3) The cash flows utilized in the discounted cash flow calculations assume liquidation at current market prices and redeployment of proceeds on all assets currently in default and all assets below specified fair value thresholds.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Fair Value at December 31, 2020

Valuation techniques

Unobservable input

Range
(Weighted average)

Debt investments:

Senior secured

37,591,521

Discounted cash flow

Discount rates

6.24% - 24.43% (10.02%)

Senior secured

982,009

Market approach

Transaction Price

Subordinated

381,516

Market approach

EBITDA multiples

7.05x - 9.10x (7.86x)

Structured Finance Notes:

Subordinated notes

3,295,738

Discounted cash flow

Discount rates

15.00% - 15.00% (15.00%)

Constant default rate

0.00% - 0.00% (0.00%)

Constant default rate after 6 months

2.00% - 2.00% (2.00%)

Recovery rate

60.00% - 60.00% (60.00%)

Mezzanine debt

1,701,388

Discounted cash flow

Discount margin

7.25% - 9.45% (8.58%)

Constant default rate

0.00% - 2.00% (1.01%)

Constant default rate after 9 months

2.00% - 3.00% (2.49%)

Recovery rate

60.00% - 60.00% (60.00%)

Equity investments:

Preferred equity

338,000

Market approach

EBITDA multiples

7.00x - 7.00x (7.00x)

Common equity

708,036

Market approach

EBITDA multiples

3.75x - 11.50x (8.43x)

44,998,208

Averages in the preceding two tables were weighted by the fair value of the related instruments.

Changes in market credit spreads or events impacting the credit quality of the underlying portfolio company (both of which could impact the discount rate), among other things, could have a significant impact on debt fair value. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

The following tables present changes in the investment measured at fair value using Level 3 inputs for the six months ended June 30, 2021 and 2020, respectively:


	Senior Secured Debt Investments		Subordinated Debt Investments		Preferred Equity		Common Equity		Structured Finance Notes		Total
Level 3 assets, January 1, 2021	$	38,573,440	$	381,516	$	338,000	$	708,036	$	4,997,216	$	44,998,208

Net unrealized appreciation (depreciation) on investments	603,980		64,618		(3,069)		(18,942)		(72,370)		574,217
Net realized loss on investments	(9,452)		—		—		—		—		(9,452)
Amortization of Net Loan Fees	263,371		2,650		—		—		41,758		307,779
Paid-in-kind interest income	62,846		1,215		—		—		—		64,061
Accretion of interest income on Structured Finance Notes	—		—		—		—		210,423		210,423
Proceeds from principal payments on portfolio investments	(18,303,902)		—		—		—		(1,600,000)		(19,903,902)
Sale of portfolio investments	(748,121)		—		—		—		—		(748,121)
Purchase of portfolio investments	13,198,160		—		—		—		2,880,700		16,078,860
Proceeds from distributions received from portfolio investments	—		—		—		—		(271,003)		(271,003)




Level 3 assets, June 30, 2021	$	33,640,322	$	449,999	$	334,931	$	689,094	$	6,186,724	$	41,301,070


	Senior Secured Debt Investments		Subordinated Debt Investments		Preferred Equity		Common Equity		Structured Finance Notes		Total
Level 3 assets, January 1, 2020	$	34,592,771	$	1,384,896	$	201,006	$	585,675	$	—	$	36,764,348

Net unrealized appreciation (depreciation) on investments	(1,153,660)		(483,345)		88,152		(108,633)		36,701		(1,620,785)
Net realized loss on investments	(578,747)		—		—		—		—		(578,747)
Amortization of Net Loan Fees	42,577		420		—				1,024		44,021
Paid-in-kind interest income	3,274		2,400		—		—		—		5,674
Proceeds from principal payments on portfolio investments	(3,851,527)		—		—		—		—		(3,851,527)
Sale of portfolio investments	(800,983)		—		—		—		—		(800,983)
Purchase of portfolio investments	9,266,867		—		—		—		752,000		10,018,867
Conversion from debt investment to equity investment (see Note 4)	(46,403)		—		—		46,403		—		—
Amendment fees collected	(667)		—		—		—		—		(667)


Level 3 assets, June 30, 2020	$	37,473,502	$	904,371	$	289,158	$	523,445	$	789,725	$	39,980,201

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

The net unrealized appreciation (depreciation) reported in the Company’s consolidated statements of operations for the six months ended June 30, 2021 and 2020, attributable to the Company’s assets still held at those respective period ends was as follows:


	Period ended June 30,
	2021		2020
Senior secured debt investments	$	508,991	$	(1,746,799)
Subordinated debt investments	64,618		(483,345)
Preferred equity	(3,069)		88,152
Common equity	(18,943)		(108,633)
Structured Finance Notes	(63,286)		36,701
Net unrealized appreciation (depreciation) on investments held	$	488,311	$	(2,213,924)

Other Financial Assets and Liabilities

The Company provides disclosure of the fair value of financial instruments for which it is practical to estimate such value. The Company believes that the carrying amounts of its other financial instruments, such as cash, receivables and payables, approximate the fair value of such items due to the short maturity of such instruments. The PWB Credit Facility is a variable rate instrument and fair value approximates book value as of June 30, 2021 and December 31, 2020.

The following tables present the fair value measurements of the Company's debt and indicate the fair value hierarchy of the significant unobservable inputs utilized by the Company to determine such fair values as of June 30, 2021 and December 31, 2020, respectively:


	June 30, 2021
Description	Level 1		Level 2		Level 3 (1)		Total
PWB Credit Facility	$	—	$	—	$	—	$	—
Unsecured Note	—		—		15,433,668		15,433,668
Total debt, at fair value	$	—	$	—	$	15,433,668	$	15,433,668


	December 31, 2020
Description	Level 1		Level 2		Level 3 (1)		Total
PWB Credit Facility	$	—	$	—	$	4,775,000	$	4,775,000
Unsecured Note	—		—		15,723,415		15,723,415
Total debt, at fair value	$	—	$	—	$	20,498,415	$	20,498,415

(1) For Level 3 measurements, fair value is estimated by discounting remaining payments using current market rates for similar instruments at the measurement date and considering such factors as the legal maturity date.

The following table sets forth the carrying values and fair values of the Company’s debt as of June 30, 2021 and December 31, 2020, respectively:


	As of June 30, 2021				As of December 31, 2020
Description	Carrying Value		Fair Value		Carrying Value		Fair Value
PWB Credit Facility	$	—	$	—	$	4,775,000	$	4,775,000
Unsecured Note	14,755,200		15,433,668		14,714,235		15,723,415
Total debt	$	14,755,200	$	15,433,668	$	19,489,235	$	20,498,415

The information presented should not be interpreted as an estimate of the fair value of the entire Company since fair value measurements are only required for a portion of the Company’s assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Note 6. Commitments and Contingencies

The Company has the following unfunded commitments to portfolio companies as of June 30, 2021 and December 31, 2020, respectively:


Name of Portfolio Company	Investment Type	June 30, 2021		December 31, 2020
A&A Transfer, LLC	Senior Secured Loan (Revolver)	$	189,843	$	237,303
BayMark Health Services, Inc.	Senior Secured Loan (Delayed Draw)	662,879		—
Convergint Technologies	Senior Secured Loan (Delayed Draw)	14,149		—
I&I Sales Group, LLC	Senior Secured Loan (Revolver)	29,304		29,304
Inergex Holdings, LLC	Senior Secured Loan (Revolver)	187,500		187,500
RSA Security	Senior Secured Loan (Delayed Draw)	364,444		—
SourceHOV Tax, Inc.	Senior Secured Loan (Revolver)	213,636		—
		$	1,661,755	$	454,107

From time to time, the Company is involved in legal proceedings in the normal course of its business. Although the outcome of such litigation cannot be predicted with any certainty, management is of the opinion, based on the advice of legal counsel, that final disposition of any litigation should not have a material adverse effect on the financial position of the Company as of June 30, 2021.

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnification. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company believes the risk of any material obligation under these indemnifications to be low.

Note 7. Borrowings

PWB Credit Facility: The Company has a $15.0 million credit commitment under its PWB Credit Facility, maturing February 28, 2023, of which $-0- was drawn as of June 30, 2021. At June 30, 2021, the effective interest rate on the PWB Credit Facility was 5.65%. The unfunded commitment under the PWB Credit Facility was $15.0 million as of June 30, 2021 and is available, subject to a borrowing base and other covenants. All investments are pledged as collateral under the PWB Credit Facility.

On February 17, 2021, the Company executed an amendment (the “Secured Revolver Amendment”) to the BLA with Pacific Western Bank. The Secured Revolver Amendment, among other things: (i) increased the maximum amount available under the PWB Credit Facility from $10.0 million to $15.0 million; (ii) decreased the interest rate floor from 5.50% per annum to 5.25% per annum; (iii) restricts the transfer of certain assets to the Company's subsidiaries or incurrence of debt by, or the encumbrance of assets of, the Company's subsidiaries; and (iv) extended the maturity date from February 28, 2021 to February 28, 2023.

Unsecured Note: As of June 30, 2021, the Company's Unsecured Note had an aggregate outstanding principal of $15.0 million. The Unsecured Note has a fixed interest rate of 6.50% and is due on November 27, 2024. At June 30, 2021, the effective interest rate on the Unsecured Note was 6.99%.

The Unsecured Note contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the 1940 Act, and minimum asset coverage ratio. The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, certain judgements and orders, and certain events of bankruptcy.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

The Company's interest expense, average outstanding borrowing and weighted average interest expense on the Company's debt are presented below:


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
PWB Credit Facility	$	59,083		$	73,276		$	105,250		$	114,710
Unsecured Note	261,783			259,158			523,566			518,316
Total interest expense (1)	$	320,866		$	332,434		$	628,816		$	633,026

Average dollar borrowings	$	16,593,681		$	19,179,121		$	17,018,370		$	17,932,967
Weighted average interest rate	7.73		%	6.76		%	7.39		%	6.80		%

(1) Interest expense is inclusive of interest on the outstanding balance, commitment fees on undrawn amounts, and the amortization of deferred debt issuance costs.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Note 8. Financial Highlights

The following is a schedule of financial highlights for the three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Per share operating performance:
Net asset value per share at beginning of period	$	12.71		$	11.89		$	12.59		$	13.00
Net investment income (6)	0.25			0.24			0.50			0.50
Net realized loss on non-control/non-affiliate investments (6)	—			(0.01)			—			(0.26)
Net unrealized appreciation (depreciation) on non-control/non-affiliate investments, net of taxes (6)	0.17			0.11			0.28			(0.76)
Total from investment operations	0.42			0.34			0.78			(0.52)
Distributions (1)	(0.25)			(0.24)			(0.51)			(0.51)
Issuance of common stock (2) (6)	—			0.01			0.02			0.03
Net asset value per share at end of period	$	12.88		$	12.00		$	12.88		$	12.00
Total return based on net asset value (3)(8)	4.3		%	3.0		%	3.3		%	(3.7)		%
Shares outstanding at end of period	2,107,953			2,188,275			2,107,953			2,188,275
Weighted average shares outstanding or subscribed	2,156,129			2,229,750			2,171,658			2,237,446
Ratio/Supplemental Data
Average net asset value (4)	$	27,557,077		$	26,503,630		$	27,518,676		$	27,375,922
Net asset value at end of period	$	27,150,827		$	26,249,692		$	27,150,827		$	26,249,692
Net investment income	$	539,058		$	535,016		$	1,089,174		$	1,121,876
Ratio of total net operating expenses to average net assets (5)	11.1		%	7.7		%	10.8		%	8.0		%
Ratio of net investment income to average net assets (5)	7.8		%	8.1		%	7.9		%	8.2		%
Portfolio turnover (7)	19.5		%	2.5		%	40.0		%	15.3		%

(1)The per share data for distributions is the actual amount of distributions declared per share during the period. The determination of the tax attributes of the Company’s distributions is made annually as of the end of its fiscal year based upon its ICTI for the full year and distributions paid for the full year. The Company anticipates its distributions to be comprised 100% from net investment income.

(2)The issuance of common stock on a per share basis reflects the incremental net asset value change as a result of the issuance of shares of common stock in the Company’s continuous public offering, the retirement of shares from the Company's repurchases of common stock and the dilutive or anti-dilutive impact from significant changes in weighted-average shares outstanding during the year.

(3)Calculated as ending net asset value less beginning net asset value, adjusting for distributions reinvested at the Company’s most recent quarter-end net asset value prior to the respective payment date of the distributions.

(4)Based on the average of the net asset value at the beginning and end of the indicated period and if applicable the preceding calendar quarters.

(5)Annualized.

(6)Calculated on the average share method.

(7)Portfolio turnover rate is calculated using the lesser of period-to-date sales and principal payments or period-to-date purchases over the average of the invested assets at fair value.

(8)Not annualized.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Note 9. Capital Transactions

Common stock transactions

Below is a summary of transactions with respect to shares of the Company’s common stock issued or subscribed in the Offering during the six months ended June 30, 2021 and 2020:


	Six Months Ended June 30,
	2021			2020
	Shares	Amount		Shares	Amount
Gross proceeds from the Offering	39,425	$	550,000	34,788	$	478,992
Commissions and dealer manager fees	—	(38,100)		—	(39,000)
Net proceeds to the Company	39,425	$	511,900	34,788	$	439,992

Distributions

The following table reflects the cash distributions per share that the Company declared on its common stock during the six months ended June 30, 2021 and 2020. Stockholders of record as of each respective record date were entitled to receive the distribution.

Date Declared

Record Dates

Payment Date

Monthly Per Share Amount

Cash
Distribution

Six Months Ended June 30, 2020

January 29, 2020

January 29, 2020, February 26, 2020 and March 27, 2020

April 15, 2020

0.0875

589,261

April 28, 2020

July 15, 2020

0.0825

182,996

May 27, 2020

July 15, 2020

0.0792

177,251

June 25, 2020

June 26, 2020

July 15, 2020

0.0822

179,554

Six Months Ended June 30, 2021

January 26, 2021

January 27, 2021

April 15, 2021

0.0846

184,337

February 23, 2021

February 24, 2021

April 15, 2021

0.0846

184,337

March 27, 2021

March 29, 2021

April 15, 2021

0.0846

186,173

April 27, 2021

April 28, 2021

July 15, 2021

0.0846

181,488

May 25, 2021

May 26, 2021

July 15, 2021

0.0846

182,987

June 26, 2021

June 28, 2021

July 15, 2021

0.0846

178,333

The per share distribution amount was $0.51 and $0.51 for the six months ended June 30, 2021 and 2020, respectively.

The above distributions were funded, in part, through the reimbursement of certain operating expenses by the Advisors under the ESAs. The ESAs are designed to ensure no portion of the Company's distribution to stockholders will be paid from Offering proceeds, and will provide for expense reduction payments to the Company in any quarterly period in which the Company's cumulative distributions to stockholders exceeds the Company's cumulative ICTI and net realized gains. The ESAs may be terminated by the Advisors, without payment of any penalty, with or without notice to the Company. However, the ESA is subordinated to the PWB Credit Facility, and prior to cancelling the ESA, the Advisors must provide Pacific Western Bank with 30 days advance written notice of such termination.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Repurchases of Shares

The following table summarizes the common stock repurchases by the Company for the six months ended June 30, 2021 and 2020, respectively:


	Number of Shares	Amount
Six months ended June 30, 2020
January 1, 2020 through April 3, 2020 (1)	32,622	$	364,384
April 4, 2020 through June 30, 2020	53,665	654,713

Six months ended June 30, 2021
January 1, 2021 through April 5, 2021(2)	55,377	$	708,272
April 6, 2021 through June 30, 2021	55,016	700,354

(1) The Company's February 21, 2020 tender offer that was originally schedule to expire on March 27, 2020, was amended to extend the offer period to April 3, 2020.

(2) The Company's February 19, 2021 tender offer that was originally schedule to expire on March 26, 2021, was amended to extend the offer period to April 5, 2021.

All repurchased shares were retired upon acquisition.

Note 10. Subsequent Events Not Disclosed Elsewhere

On July 27, 2021, the Board declared a distribution of $0.0846 per common share, which represents a 7.1% distribution yield, payable on October 15, 2021, to stockholders of record on July 28, 2021.

On August 10, 2021, the Board approved a tender offer, commencing on August 27, 2021, to purchase 2.5% of the weighted average number of shares of the outstanding Common Stock for the trailing 12-month period ending June 30, 2021.

COVID-19

The Company evaluated events subsequent to June 30, 2021 through August 12, 2021. We are continuing to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, including how it impacts our portfolio companies, employees, due diligence and underwriting processes, and financial markets. The U.S. capital markets experienced extreme volatility and disruption following the outbreak of the COVID-19 pandemic, which appear to have subsided and returned to pre-COVID-19 levels. Nonetheless, certain economists and major investment banks have expressed concern that the continued spread of the virus globally could lead to a prolonged period of world-wide economic downturn.

On March 27, 2020, the U.S. government enacted the CARES Act, which contains provisions intended to mitigate the adverse economic effects of the coronavirus pandemic. On December 27, 2020, the U.S. government enacted the December 2020 COVID Relief Package. Additionally, on March 11, 2021, the U.S. government enacted the American Rescue Plan, which included additional funding to mitigate the adverse economic effects of the COVID-19 pandemic. It is uncertain whether, or to what extent, our portfolio companies will be able to benefit from the CARES Act, the December 2020 COVID Relief Package, the American Rescue Plan, or any other subsequent legislation intended to provide financial relief or assistance. As a result of this disruption and the pressures on their liquidity, certain of our portfolio companies have been, or may continue to be, incentivized to draw on most, if not all, of the unfunded portion of any revolving or delayed draw term loans made by us, subject to availability under the terms of such loans.

The extent of the impact of the COVID-19 pandemic on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame, will depend to a large extent on future developments regarding the duration and severity of the coronavirus, effectiveness of vaccination deployment and the actions taken by governments (including stimulus measures or the lack thereof) and their citizens to contain the coronavirus or treat its impact, all of which are beyond our control. An extended period of global supply chain and economic disruption could materially affect our business, results of operations, access to sources of liquidity and financial condition. Given the fluidity of the situation, we cannot estimate the long-term impact of COVID-19 on our business, future results of operations, financial position, or cash flows at this time.

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

The following analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. For additional overview information on the Company, see "Item 1. Business" in our Annual Report on Form 10-K for the year ended December 31, 2020.

Overview

Key performance metrics are presented below:


	June 30, 2021		March 31, 2021
Net asset value per common share	$	12.88	$	12.71


	Three Months Ended				Six Months Ended June 30,
	June 30, 2021		March 31, 2021		2021		2020
Net investment income per common share	$	0.25	$	0.25	$	0.50	$	0.50
Net increase (decrease) in net assets resulting from operations per common share	0.42		0.36		0.78		(0.52)
Distributions declared per common share	0.25		0.25		0.51		0.51

During the three months ended June 30, 2021, our portfolio experienced net gains of $369,877, or $0.17 per share, principally due to positive performance factors on our subordinated debt investment in Eblens Holdings, Inc. and our Structured Finance Note investment in Apex Credit CLO 2020, which appreciated $182,234 and $138,988, respectively. Net investment income per share remained consistent compared to the prior quarter. For the three months ended June 30, 2021, weighted average yield on debt and Structured Finance Notes increased to 9.44% from 9.33% in the quarter ending March 31, 2021, primarily due to investments made during the three months ended June 30, 2021 that have a weighted average yield of 10.9%. As of June 30, 2021, our weighted average interest costs remained stable at 6.86% compared to the prior quarter.

Since OFS Advisor implemented its business continuity plan in mid-March 2020, OFS Advisor's entire team has effectively transitioned to remote work and we are currently capable of maintaining our normal functionality to complete our operational requirements.

OFS Advisor has actively monitored our portfolio companies throughout this period of economic uncertainty, which included on-going assessments of our portfolio companies' operational and liquidity outlook. During the three months ended June 30, 2021, we provided revolvers and delayed draw facilities with total commitments of $1,240,959 to four portfolio companies and amended a senior secured loan which resulted in an increased spread. As of June 30, 2021, we had unfunded commitments of $1,661,755 to seven portfolio companies. During the three months ended June 30, 2021, we purchased two Structured Finance Notes for an aggregate cost of $2,743,200 and completed $5,777,174 in Portfolio Company Investments.

At June 30, 2021, our asset coverage ratio was 281% and we remained in compliance with all applicable financial covenant thresholds under our outstanding debt and our minimum asset coverage requirement under the 1940 Act. As of June 30, 2021, we had an unfunded commitment of $15.0 million under our PWB Credit Facility. Based on fair values and equity capital at June 30, 2021, we could access our entire commitment under the PWB Credit Facility and have an asset coverage ratio of 204%. We continue to believe that we have sufficient levels of liquidity to support our existing portfolio companies and expect to continue to selectively deploy capital in new investment opportunities in this challenging environment.

On July 27, 2021, our Board declared a $0.0846 per common share distribution, payable on October 15, 2021, to stockholders of record on July 28, 2021.

We cannot predict the full impact of the COVID-19 pandemic, including its duration in the United States and worldwide, and the magnitude of the economic impact of the outbreak, including the impact of travel restrictions, business closures and other quarantine measures imposed on service providers and other individuals by various local, state, and federal governmental authorities, as well as non-U.S. governmental authorities. As such, we are unable to predict the duration of any business and supply-chain disruptions, the extent to which the COVID-19 pandemic will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition. Depending on the duration and extent of the disruption to the operations of our portfolio companies, we expect that certain portfolio companies will experience financial distress and possibly default on their financial obligations to us and their other capital providers. Some of our portfolio companies have significantly curtailed business operations, furloughed or laid off employees and terminated service providers and deferred capital expenditures, which could impair their business on a

permanent basis. These developments would likely result in a decrease in the value of our investment in any such portfolio company.

We will continue to monitor the rapidly evolving situation relating to the COVID-19 pandemic and guidance from U.S. and international authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations. In these circumstances, there may be developments outside our control requiring us to adjust our plan of operation. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impact of the COVID-19 pandemic on our financial condition, results of operations or cash flows in the future. However, to the extent our portfolio companies continue to be adversely impacted by the COVID-19 pandemic, our future net investment income, financial condition, results of operations and the fair value of our portfolio investments may be materially adversely impacted.

We are also subject to financial risks, including changes in market interest rates. As of June 30, 2021, approximately $35 million (principal amount) of our debt investments bore interest at variable rates, which are generally LIBOR-based, and many of which are subject to reference-rate floors. In connection with the COVID-19 pandemic, and primarily during the second quarter of 2020, the U.S. Federal Reserve and other central banks reduced certain interest rates and LIBOR decreased. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on our portfolio investments, a decrease in our operating expenses, including with respect to our Income Incentive Fee, or a decrease in the interest rate of our floating interest rate liabilities indexed to LIBOR. As of June 30, 2021, the majority of our variable rate debt investments are subject to the base rate floor, partially mitigating the impact of the recent decrease in LIBOR on our gross investment income.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

•The Investment Advisory Agreement with OFS Advisor to manage our operating and investment activities. Under the Investment Advisory Agreement we have agreed to pay OFS Advisor an annual base management fee based on the average value of our total assets (other than cash but including assets purchased with borrowed amounts and including assets owned by any consolidated entity) as well as an incentive fee based on our investment performance. See "Item 1. Financial Statements –– Notes to Consolidated Financial Statements – Note 3."

•The Sub-Advisory Agreement with CIM Capital, an affiliate of OFS Advisor, to assist OFS Advisor with the management of our activities and operations. See "Item 1. Financial Statements –– Notes to Consolidated Financial Statements – Note 3."

•The Dealer Manager Agreement with CCO, an affiliate of OFS Advisor and CIM Capital, to provide sales, promotional and marketing services to us in connection with the Offering. See "Item 1. Financial Statements –– Notes to Consolidated Financial Statements – Note 3."

•The Administration Agreement with OFS Services, an affiliate of OFS Advisor, to provide us with the office facilities and administrative services necessary to conduct our operations. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 3."

•Expense Limitation Agreements: OFS Advisor, and effective August 3, 2020, CIM Capital, limit the Company's incurred expenses under two agreements: (1) the Investment Advisory Agreement, which contains provisions limiting organization and offering costs, and Contractual Issuer Expenses; and (2) an Expense Support Agreement, which limits all other operating expenses. Both agreements contain conditions under which we may become obligated to reimburse OFS Advisor or CIM Capital for expense limitations provided thereunder. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 3."

OFS Advisor’s services under the Investment Advisory Agreement are not exclusive to us and OFS Advisor is free to furnish similar services to other entities, including other BDCs affiliated with OFS Advisor, so long as its services to us are not impaired. OFS Advisor also serves as the investment adviser to CLO funds and other assets, including OFS Capital and OCCI. OFS Advisor provides sub-advisory services to CMFT Securities Investments, LLC, a wholly owned subsidiary of CIM Real Estate Finance Trust, Inc., a corporation that qualifies as a real estate investment trust. Additionally, OFS Advisor serves as sub-adviser to CIM Real Assets & Credit Fund, an externally managed registered investment company that operates as an interval fund that invests primarily in a combination of real estate, credit and related investments.

The 1940 Act generally prohibits BDCs from making certain negotiated co-investments with certain affiliates absent an order from the SEC permitting the BDC to do so. On August 4, 2020, we received the Order, which superseded a previous order we received on October 12, 2016 and provides us with greater flexibility to enter into co-investment transactions with Affiliated Funds. Pursuant to the Order, we are generally permitted to co-invest with Affiliated Funds if a “required

majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies.

In addition, pursuant to an exemptive order issued by the SEC on April 8, 2020 and applicable to all BDCs, through December 31, 2020, we were permitted, subject to the satisfaction of certain conditions, to co-invest in our existing portfolio companies with certain affiliates, even if such other funds had not previously invested in such existing portfolio company. Without this order, Affiliated Funds would not be able to participate in such co-investments with us unless the Affiliated Funds had previously acquired securities of the portfolio company in a co-investment transaction with us. Although the conditional exemptive order expired on December 31, 2020, the SEC’s Division of Investment Management has indicated that until March 31, 2022, it will not recommend enforcement action to the extent that any BDC with an existing co-investment order continues to engage in certain transactions described in the conditional exemptive order, pursuant to the same terms and conditions described therein.

Conflicts may arise when an account managed by OFS Advisor makes an investment in conjunction with an investment being made by an Affiliated Account, or in a transaction where an Affiliated Account has already made an investment. Investment opportunities are, from time to time, appropriate for more than one account in the same, different or overlapping securities of a portfolio company’s capital structure. Conflicts arise in determining the terms of investments, particularly where these accounts may invest in different types of securities in a single portfolio company. Potential conflicts arise when addressing, among other things, questions as to whether payment obligations and covenants should be enforced, modified or waived, or whether debt should be restructured, modified or refinanced. For additional information see "Item 1A. Business — Conflicts of Interest" and "Item 1A. Risk Factors — Risks Related to Our Business and Structure — We have potential conflicts of interest related to obligations that OFS Advisor or its affiliates may have to other clients" in our Annual Report on Form 10-K for the year ended December 31, 2020.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are those relating to revenue recognition, expense limitation agreements and fair value estimates. Management has discussed the development and selection of each critical accounting policy and estimate with the Audit Committee of the Board. For descriptions of our revenue recognition and fair value policies, see "Item 8. Financial Statements – Notes to Consolidated Financial Statements – Note 2" and "Management's Discussion and Analysis – Critical Accounting Policies and Significant Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2020.

Fair value estimates. Our approach to fair value estimates was significantly adjusted in response to the economic uncertainty associated with the spread of the COVID-19 pandemic, principally through adjustments to the weights given the various methodologies we utilize to estimate discount rates, greater use of pandemic-adjusted forward-looking information, and shortening the evaluation periods used to assess the market depth and liquidity associated with Indicative Prices. These adjustments resulted from observed decreases in the historic correlation between observable inputs utilized on our valuation models. However, as of December 31, 2020, we had reverted all of our methodologies to their pre-pandemic weightings as financial markets stabilized and the correlations between observable market factors returned.

The following table illustrates the impact of our fair value measures if we selected the low or high end of the range of values for all investments at June 30, 2021:


	Fair Value at June 30, 2021		Range of Fair Value
Investment Type			Low-end		High-end
Debt investments:
Senior secured	$	31,592,614	$	31,433,191	$	31,778,855
Senior secured (Transaction Price)	3,653,602		3,653,602		3,653,602
Subordinated	449,999		429,654		470,345

Structured Finance Notes:
Subordinated notes	4,390,719		4,257,256		4,524,183
Mezzanine debt	1,796,004		1,764,793		1,827,216

Equity investments:
Preferred equity	334,931		277,460		392,402
Common equity	689,094		602,805		756,658
	$	42,906,963	$	42,418,761	$	43,403,261

The SEC issued a final rule in 2020 modifying Rule 2a-5 under the 1940 Act to establish requirements for determining fair value in good faith for purposes of the 1940 Act. We are evaluating the impact of adopting Rule 2a-5 on the consolidated financial statements and intend to comply with the new rule’s requirements on or before the compliance date in September 2022.

Portfolio Composition and Investment Activity

Portfolio Composition

The following table summarizes the composition of our Portfolio Company Investments as of June 30, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Senior secured debt investments (1)	$	35,021,469	$	35,246,215	$	39,315,954	$	38,890,010
Subordinated debt investments	1,486,329		449,999		1,482,464		381,516
Preferred equity investments	191,409		334,931		191,409		338,000
Common equity investments	540,157		689,094		540,157		708,036
Total Portfolio Company Investments	$	37,239,364	$	36,720,239	$	41,529,984	$	40,317,562
Total number of portfolio companies	27		27		35		35

(1)Includes debt investments, typically referred to as unitranche, in which we have entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, we have agreed to receive our principal payments after the repayment of certain co‑lenders pursuant to a payment waterfall. At June 30, 2021, the aggregate amortized cost and fair value of these investments was $5,144,564 and $5,280,733, respectively.

As of June 30, 2021, all of our senior secured debt investments were floating rate loans and our subordinated debt investments were fixed rate loans. Approximately 96% of our Portfolio Company Investments at fair value, are senior securities of the borrower, rather than in the subordinated securities, preferred equity or common equity. We believe the seniority of our debt investments in the borrowers' capital structures may provide greater downside protection against the impact of the COVID-19 pandemic.

As of June 30, 2021, the three largest industries of our Portfolio Company Investments by fair value, were (1) Professional, Scientific, and Technical Services of 22.2%, (2) Wholesale Trade of 17.8% and (3) Manufacturing of 12.6%, totaling approximately 52.6% of the investment portfolio. For a full summary of our investment portfolio by industry, see "Item 1–Financial Statements–Note 4."

The weighted average yield on total investments(1) was 9.27% and 9.03% at June 30, 2021 and December 31, 2020, respectively. The following table displays the composition of our performing debt investments and Structured Finance Note portfolio by yield range and its weighted average yields as of June 30, 2021 and December 31, 2020:


	June 30, 2021						December 31, 2020
	Senior Secured		Subordinated		Structured Finance					Senior Secured		Subordinated		Structured Finance
Yield Range	Debt		Debt		Notes			Total		Debt		Debt		Notes		Total
Less than 8%	31.2	%	—	%	—	%		26.3	%	25.5	%	—	%	16.6	%	25.2	%
8% - 10%	53.3		—		—			45.0		55.7		—		17.1		55.0
10% - 12%	10.2		—		15.8			10.9		16.3		—		—		16.1
12% - 14%	5.3		100.0		63.3			14.7		2.5		100.0		—		3.7
Greater than 14%	—		—		20.9			3.0		—		—		66.3		—
Total	100.0	%	100.0	%	100.0	%		99.9	%	100.0	%	100.0	%	100.0	%	100.0	%
Weighted average yield - performing debt and Structured Finance Note investments (2)	9.00	%	13.98	%	13.24	%		9.67	%	8.99	%	12.73	%	12.12	%	9.03	%
Weighted average yield - total debt and Structured Finance Note investments (3)	9.00	%	4.49	%	13.24	%		9.44	%	8.99	%	4.08	%	12.12	%	8.81	%

(1) Weighted average yield on total investments is computed as (a) the sum of (i) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of Net Loan Fees, plus the effective yield on our performing preferred equity investments, (ii) plus the annual effective yield on Structured Finance Notes, divided by (b) amortized cost of our total investment portfolio, including assets in non-accrual status as of the balance sheet date.

(2) The weighted average yield on our performing debt and Structured Finance Note investments is computed as (a) the sum of (i) the annual stated accruing interest on debt investments plus the annualized accretion of Net Loan Fees; and (ii) the annual effective yield on Structured Finance Notes divided by (b) amortized cost of our debt and Structured Finance Note investments, excluding debt investments in non-accrual status as of the balance sheet date.

(3) The weighted average yield on our total debt and Structured Finance Note investments is computed as (a) the sum of (i) the annual stated accruing interest plus the annualized accretion of Net Loan Fees and (ii) plus the annual effective yield on Structured Finance Notes divided by (b) amortized cost of our debt and Structured Finance Note investments, including debt investments in non-accrual status as of the balance sheet date.

The weighted average yield of our investments is not the same as a return on investment for our stockholders but rather the gross investment income from our investment portfolio before the payment of all of our fees and expenses. There can be no assurance that the weighted average yield will remain at its current level.

Investment Activity

The following is a summary of our investment activity for the three and six months ended June 30, 2021:


	Three Months Ended June 30, 2021				Six Months Ended June 30, 2021
	Debt Investments		Equity Investments		Debt Investments		Equity Investments
Investments in new portfolio companies	$	3,655,445	$	—	$	4,944,232	$	—
Investments in existing portfolio companies:
Follow-on investments	2,026,808		—		9,774,766		—

Delayed draw / revolver funding	94,921		—		94,921		—
Total investments in existing portfolio companies	2,121,729		—		9,869,687		—
Total investments in new and existing portfolio companies	$	5,777,174	$	—	$	14,813,919	$	—
Number of new portfolio company investments	4		—		5		—
Number of existing portfolio company investments	4		—		12		—
Proceeds from principal payments	$	9,691,763	—		$	20,182,750	—
Proceeds from investments sold or redeemed	751,253		—		856,353		—
Total proceeds from principal payments, equity distributions and investments sold	$	10,443,016	$	—	$	21,039,103	$	—

During the six months ended June 30, 2021, notable investments include Convergint Technologies Holdings, LLC ($3.1 million senior secured loans), Confie Seguros Holdings II Co. ($1.7 million senior secured loan) and BayMark Health Services, Inc. ($3.8 million senior secured loan).

During the six months ended June 30, 2021, we also invested $2,878,638 in Structured Finance Notes.

Non-cash investment activity

On March 27, 2020, our debt investments in Constellis Holdings, LLC were restructured. We converted our non-accrual debt investments for two new debt investments and 1,362 shares of common equity. The cost and fair value of debt investments received were $6,174 and $6,172, respectively, and the cost and fair value of the common shares received were $46,403 and $46,410, respectively. For the six months ended June 30, 2020, we recognized a realized loss on the restructuring of $526,444, which was fully recognized as an unrealized loss as of December 31, 2019.

The following is a summary of our investment activity for six months ended June 30, 2020:


	Three Months Ended June 30, 2020				Six Months Ended June 30, 2020
	Debt Investments		Equity Investments		Debt Investments		Equity Investments
Investments in new portfolio companies	$	91,250	$	—	$	6,278,807	$	—
Investments in existing portfolio companies:
Follow-on investments	—		—		2,644,620		—
Restructured investments	—		—		10,147		46,403
Delayed draw / revolver funding	218,393		—		424,543		—
Total investments in existing portfolio companies	218,393		—		3,079,310		46,403
Total investments in new and existing portfolio companies	$	309,643	$	—	$	9,358,117	$	46,403
Number of new portfolio company investments	1		—		4		—
Number of existing portfolio company investments	3		—		11		1
Proceeds from principal payments	$	1,250,387	$	—	$	3,852,820	$	—
Proceeds from investments sold or redeemed	1,618,928		—		2,517,950		—
Total proceeds from principal payments, equity distributions and investments sold	$	2,869,315	$	—	$	6,370,770	$	—

During the six months ended June 30, 2020, notable investments in new portfolio companies include A&A Transfer, LLC. ($2.0 million senior secured loan) and SourceHOV Tax, Inc. ($2.3 million senior secured loan).

During the six months ended June 30, 2020, we also invested $752,000 in Structure Finance Notes with a weighted average annual effective yield of 13.50%.

Our level of investment activity may vary substantially from period to period depending on various factors, including, but not limited to, the amount of debt and equity capital available to middle market companies, the level of merger and acquisition activity and the general economic and competitive environment in which we make investments.

We categorize debt investments into seven risk categories based on relevant information about the ability of borrowers to service their debt. For additional information regarding our risk categories, see “Item 1. Business–Portfolio Review/Risk Monitoring” in our Annual Report on Form 10-K for the year ended December 31, 2020. The following table shows the classification of our debt securities of portfolio companies by credit risk rating as of June 30, 2021 and December 31, 2020.


	Debt Investments, at Fair Value
Risk Category	June 30, 2021				December 31, 2020
1 (Low Risk)	$	—	—	%	$	—	—	%
2 (Below Average Risk)	—		—		—		—
3 (Average)	35,352,364		99.1		37,258,347		94.9
4 (Special Mention)	337,969		0.9		1,861,548		4.7
5 (Substandard)	—		—		151,631		0.4
6 (Doubtful)	5,882		—		—		—
7 (Loss)	—		—		—		—
	$	35,696,214	100.0	%	$	39,271,526	100.0	%

Changes in the distribution of our debt investments across risk categories during the six months ended June 30, 2021 were a result of new debt investments, the receipt of amortization payments on existing debt investments, repayment of certain debt investments in full, changes in the fair value of our existing debt investments and realized gains on the sale of investments. During the six months ended June 30, 2021, a debt investment with a cost and fair value of $477,197 and $444,117, respectively, had risk rating upgrade from risk category 4 to risk category 3. A debt investment with a cost and fair value of $1,009,132 and $5,882, respectively, had risk rating downgrade from risk category 5 to risk category 6.

Non-Accrual Loans

When there is reasonable doubt that principal, cash interest, or PIK interest will be collected, loan investments are placed on non-accrual status and the Company will generally cease recognizing cash interest, PIK interest, or Net Loan Fee amortization, as applicable. Interest accruals and Net Loan Fee amortization are resumed on non-accrual investments only when they are brought current with respect to principal, interest and when, in the judgment of management, the investments are estimated to be fully collectible as to all principal. No new loans were placed on non-accrual status during the six months ended June 30, 2021. At June 30, 2021, the amortized cost and fair value of the loan on non-accrual status with respect to all interest and Net Loan Fee amortization was $1,009,132 and $5,882, respectively, and $1,007,141 and $151,631 at December 31, 2020, respectively.

On March 27, 2020, our debt investments in Constellis Holdings, LLC were restructured. We converted our non-accrual debt investments into two new debt investments and 1,362 shares of common equity. The cost and fair value of debt investments received were $6,174 and $6,172, respectively, and the cost and fair value of the shares of common equity received were $46,403 and $46,410, respectively.

Results of Operations

Our key financial measures are described in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations–Results of Operations–Key Financial Measures" in our Annual Report on Form 10-K for the year ended December 31, 2020. The following is a discussion of the key financial measures that management uses in reviewing the performance of our operations.

We do not believe that our historical operating performance is necessarily indicative of our future results of operations. We are primarily focused on debt investments in middle-market and larger companies in the United States and, to a lesser extent, equity investments, including warrants and other minority equity securities. Moreover, as a BDC and a RIC, we will also be subject to certain constraints on our operations, including, but not limited to, limitations imposed by the 1940 Act and the Code. For the reasons described above, the results of operations described below may not necessarily be indicative of the results we expect to report in future periods.

Net increase in net assets resulting from operations can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, annual comparisons of net increase in net assets resulting from operations may not be meaningful.

The following analysis compares our quarterly results of operations to the preceding quarter, as well as our year-to-date results of operations to the corresponding period in the prior year. We believe a comparison of our current quarterly results to the preceding quarter is more meaningful and transparent than a comparison to the corresponding prior-year quarter as our results of operations are not influenced by seasonal factors the latter comparison is designed to elicit and highlight.

Comparison of the three months ended June 30, 2021 and March 31, 2021 and comparison of the six months ended June 30, 2021 and 2020


	Three Months Ended				Six Months Ended June 30,
	June 30, 2021		March 31, 2021		2021		2020
Interest income	$	1,187,008	$	1,230,931	$	2,417,939	$	2,138,765
Fee income	116,110		34,319		150,429		79,002
Total investment income	$	1,303,118	$	1,265,250	$	2,568,368	$	2,217,767

Investment income for the three and six months ended June 30, 2021, consisted primarily of interest income on our debt investments and syndication fee income. For the three months ended June 30, 2021, interest income decreased compared to the prior quarter primarily due to greater Net Loan Fees and payoffs in the prior quarter. For the six months ended June 30, 2021, interest income increased compared to the corresponding period in the prior year primarily due to an increase in the weighted average yield of our investments and the acceleration of Net Loan Fees related to payoffs. For the three and six months ended June 30, 2021, fee income increased compared to the prior quarter and corresponding period in the prior period due to additional syndication fees.

Gross Expenses. Our gross expenses are limited under the Sub-Advisory Agreement and Expense Support Agreement; see "—Expense Limitations." Investment expenses shown with respect to each governing expense limitation agreement for the three months ended June 30, 2021 and March 31, 2021 and the six months ended June 30, 2021 and 2020, are presented below:


	Three Months Ended				Six Months Ended June 30,
	June 30, 2021		March 31, 2021		2021		2020
Expenses subject to limitation under the Sub-Advisory Agreement:
Amortization of deferred offering costs	$	24,860	$	42,428	$	67,288	$	168,566
Contractual issuer expenses	—		—		—		536
Total expenses subject to limitation under the Sub-Advisory Agreement	24,860		42,428		67,288		169,102
Expenses subject to limitation under the Expense Support Agreement:
Interest expense	320,866		307,950		628,816		633,026
Management fees	137,332		141,168		278,500		265,397
Incentive fees	48,495		68,764		117,259		141,477
Administration fee	186,544		186,389		372,933		401,741
Professional fees	242,341		201,145		443,486		289,068
Insurance expense	28,840		26,944		55,784		48,709
Transfer agent fees	35,057		24,917		59,974		46,808
Other expenses	25,368		7,157		32,525		22,359
Total expenses subject to limitation under the ESAs	1,024,843		964,434		1,989,277		1,848,585
Total expenses	$	1,049,703	$	1,006,862	$	2,056,565	$	2,017,687

Expenses Limited under the Advisory Agreements

CIM Capital incurred, on our behalf, offering costs of $15,558 and $820 during the three months ended June 30, 2021 and March 31, 2021, respectively, which are deferred and amortized over the twelve months following incurrence. For the six months ended June 30, 2021 and 2020, offering costs incurred were $16,378 and $169,834, respectively. Pursuant to the terms of the Sub-Advisory Agreement, beginning August 3, 2020, CIM Capital assumed responsibility for bearing offering and Contractual Issuer Expenses relating to the Offering.

Amortization of offering costs were $24,860 and $42,428 for the three months ended June 30, 2021 and March 31, 2021, respectively, compared to $67,288 and $168,566 for the six months ended June 30, 2021 and 2020, respectively. Lower amortization expense in the three and six months ended June 30, 2021, compared to the prior quarter and corresponding period in the prior year, relates to reduced monthly costs of developing distribution platforms of the Offering. We reimbursed the Advisors $3,750 and $4,500 for offering expenses and Contractual Issuer Expenses for the three months ended June 30, 2021, and March 31, 2021, respectively, compared to $8,250 and $7,185 for the six months ended June 30, 2021 and 2020, respectively.

Expense Limitations under the Advisory Agreements. The expense limitations provided under the Advisory Agreements associated with offering costs and expenses during the three months ended June 30, 2021 and March 31, 2021 and the six months ended June 30, 2021 and 2020, is presented below:


	Three Months Ended				Six Months Ended June 30,
	June 30, 2021		March 31, 2021		2021		2020
Total expenses limited under the Advisory Agreements	$	24,860	$	42,428	$	67,288	$	169,103





Offering costs and Contractual Issuer Expenses reimbursed and incurred	(3,750)		(4,500)		(8,250)		(7,185)
Net offering costs and Contractual Issuer Expenses limitations under the Advisory Agreements	$	21,110	$	37,928	$	59,038	$	161,918

We are conditionally obligated to pay the Advisors up to 1.5% of the gross proceeds raised in the Offering until all reimbursable offering costs and Contractual Issuer Expenses paid by the Advisors have been recovered. Reimbursable offering costs and Contractual Issuer Expenses were $589,035 as of June 30, 2021.

Expenses Limited under the ESAs

For the three and six months ended June 30, 2021, professional fees increased due to additional accounting and valuation services compared to the prior quarter and corresponding period in the prior year.

All other expenses during the three and six months ended June 30, 2021 remained stable compared to the prior period and corresponding period in the prior year.

CIM Capital will be entitled to receive reimbursement from us for offering costs and Contractual Issuer Expenses paid on our behalf, after August 3, 2020, up to 1.5% of the aggregate gross proceeds of the Offering, after offering costs and Contractual Issuer Expenses incurred prior to August 3, 2020 have either expired or been reimbursed. Offering expenses and Contractual Issuer Expenses incurred by CIM Capital or its affiliates will be eligible for reimbursement for three years from the date incurred. Any such reimbursement by us will be allocated first to reimburse any reimbursable expenses incurred by OFS Advisor or its affiliates that are eligible for reimbursement pursuant to the Investment Advisory Agreement.

Expense Limitations under the ESAs. Gross operating expenses (operating expenses exclusive of organization and offering expenses, and Contractual Issuer Expenses, and before limitations) are subject to limitation under the ESAs. The Advisors' obligation to provide such expense support is a function of declared distributions on our common stock, and the amount of support provided is determined by reference to investment company taxable income (expense) and net realized gains (losses) prior to expense limitation, and the amount of declared distributions; the ESAs provide expense support such that distributions are not paid from Offering proceeds. The determination of expense limitation under the Expense Support Agreement for the three months ended June 30, 2021 and March 31, 2021 and the six months ended June 30, 2021 and 2020, are presented below.


	Three Months Ended				Six Months Ended June 30,
	June 30, 2021		March 31, 2021		2021		2020
Total investment income	$	1,303,118	$	1,265,250	$	2,568,368	$	2,217,767
Expenses limited under the Expense Support Agreement (1):
Interest expense, base management fees, and incentive fees	506,693		517,882		1,024,575		1,039,900
Other operating expenses as defined in the Expense Support Agreement (2)	518,150		446,552		964,702		808,683
Total expenses limited under the Expense Support Agreement	1,024,843		964,434		1,989,277		1,848,583
Net investment income prior to limitation	278,275		300,816		579,091		369,184
Differences in recognition of ICTI and GAAP net investment income	—		231		231		—

ICTI prior to expense limitation	278,275		301,047		579,322		369,184
Declared distributions	542,808		554,847		1,097,655		1,129,062
Expense limitation under Expense Support Agreement	$	264,533	$	253,800	$	518,333	$	759,878

(1)Expense limitation under ESAs exclude organization costs, amortization of deferred offering costs, Contractual Issuer Expenses, and the related expense support under the Advisory Agreements, and other operating expenses of HPCI-MB as such expenses are permanent differences between GAAP and ICTI. See “Item 8. Financial Statements–Notes to Consolidated Financial Statements–Note 8” in our Annual Report on Form 10-K.

(2)Generally defined in the ESAs as our operating expenses determined in accordance with GAAP excluding organization and offering expenses, Contractual Issuer Expenses, interest expense, base management fees, and incentive fees. The annualized ratio of other operating expenses to net assets for the period support in which support is provided, and the annual ratio for the year in which support, constitute conditions for reimbursement to the Advisors. See "Item 8. Financial Statements–Note 3" in our Annual Report on Form 10-K.

Net realized and unrealized gain (loss) on investments

Net gain on investments for the three months ended June 30, 2021 and March 31, 2021

During the three months ended June 30, 2021, our portfolio experienced net gains of $369,877, primarily attributable to a $182,234 improvement on our subordinated debt investment in Eblens Holdings, Inc.

During the three months ended March 31, 2021, we recognized net gains of $248,282, primarily due to unrealized appreciation of $237,759 on our investment on our senior secured debt investment in Wastebuilt Environmental Solutions, LLC.

Net gain on investments for the six months ended June 30, 2021 and 2020

During the six months ended June 30, 2021, our portfolio experienced net gains of $614,159, driven by unrealized appreciation of $223,633 and $172,801 on our senior secured debt investments in Wastebuilt Environmental Solutions, LLC and All Star Auto Lights, Inc., respectively. We also had unrealized appreciation of $212,358 on our subordinated debt investment in Eblens Holdings, Inc.

During the six months ended June 30, 2020, our portfolio experienced net unrealized losses of $1,694,527, primarily due to the adverse economic effects of the COVID-19 pandemic on market conditions and the overall economy, and the related declines in quoted loan prices.

Liquidity and Capital Resources

At June 30, 2021, we held cash of $3.9 million and had $15.0 million of unfunded commitments under our $15.0 million PWB Credit Facility that is available subject to a borrowing base and other covenants. Based on fair values and equity

capital at June 30, 2021, we could access our entire PWB Credit Facility and have an asset coverage ratio of 204%. We continue to believe that we have sufficient levels of liquidity to support our existing portfolio companies and selectively deploy capital in new investment opportunities in this challenging environment.

Sources and Uses of Cash

We expect to generate cash primarily from (i) the net proceeds of the Offering, (ii) cash flows from our operations, including net amounts received from CIM Capital, (iii) the PWB Credit Facility and any other financing arrangements we may enter into in the future and (iv) any future offerings of our equity or debt securities. We may fund a portion of our investments through borrowings from banks, including the PWB Credit Facility, and issuances of senior securities. Our primary use of cash will be for (i) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (ii) the cost of operations (including paying the Advisors), (iii) debt service of any borrowings, including the Unsecured Note and (iv) cash distributions to the holders of our stock. These principal sources and uses of cash and liquidity are presented below:


	Six Months Ended June 30,
	2021		2020
Cash from net investment income(1)	$	990,708	$	1,038,622
Net purchases and originations of portfolio investments(1)	6,707,956		(8,232,553)
Net cash provided by (used in) operating activities	7,698,664		(7,193,931)
Net proceeds from issuances of common stock	511,900		439,992
Repurchase of common stock	(1,409,207)		(364,384)
Net borrowings (repayments) under revolving line of credit	(4,775,000)		1,800,000
Common stock distributions paid	(1,104,043)		(1,173,174)
Payment of debt issuance costs	(10,000)		(50,000)
Net cash used in (provided by) financing activities	(6,786,350)		652,434
Net change in cash	$	912,314	$	(6,541,497)

(1) Net (purchases and originations)/repayments and sales of portfolio investments includes purchase and origination of portfolio investments, proceeds from principal payments on portfolio investments, proceeds from sale or redemption of portfolio investments, changes in receivable for investments sold, payable form investments purchased as reported in our statements of cash flows, as well as the excess of proceeds from distributions received from structured finance notes over accretion of interest income on structured finance notes. Cash from net investment income includes all other cash flows from operating activities reported in our statements of cash flows. Certain amounts in the prior year have been reclassified to conform with the current year presentation.

We provided $7,698,664 and used $7,193,931 in cash from operating activities for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, the principal source of operating liquidity was investment income collected. The decrease in total investment income collected is due to the increase in PIK interest which now comprises 2% of interest income and timing differences in the recognition and collection of interest income on our subordinated note investment. Net cash provided by (used in) operating activities increased $14,892,595 over the corresponding period, primarily due to an increase in proceeds from principal payments on portfolio investments. Net cash provided by (used in) operating activities benefited from the positive cash flow impact of expense limitations under the Advisory Agreements and ESAs of $577,371 and $921,796 for the six months ended June 30, 2021 and 2020, respectively, which reduced the net amount paid to the Advisors. Expense support and limitation under both the Advisory Agreements and the ESAs are cancelable at any time. However, the ESA is subordinated to the PWB Credit Facility, and prior to cancelling the ESA, the Advisors must provide Pacific Western Bank with 30 days advance written notice of such termination.

Net purchases and origination of portfolio investments relates to the deployment of Offering proceeds. See "—Portfolio Composition and Investment Activity."

We collected $511,900 and $439,992 from the sale of our common stock during the six months ended June 30, 2021 and 2020, respectively. Offering proceeds are net of aggregate commissions and dealer manager fees of $38,100 and $39,000 for the six months ended June 30, 2021 and 2020, respectively.

During the six months ended June 30, 2021, we paid $1,104,043 in dividends to common stockholders and, subsequent to June 30, 2021, we paid $542,808 in dividends to our common stockholders.

Borrowings

PWB Credit Facility. The PWB Credit Facility is available for general corporate purposes, including investment funding, and is scheduled to mature on February 28, 2023. The maximum availability of the PWB Credit Facility is equal to

35% of the aggregate outstanding principal amount of eligible loans included in the borrowing base, which excludes subordinated loan investments and as otherwise specified in the BLA. The PWB Credit Facility bears interest at a variable rate of the Prime Rate plus a 0.75% margin, with a 5.25% floor, and includes an unused commitment fee equal to 0.50% per annum for any unused portion in excess of $3.0 million, payable monthly in arrears. As of June 30, 2021, the stated interest rate on the PWB Credit Facility was 5.25%. The PWB Credit Facility bore an effective interest rate of 5.65%, inclusive of interest on the outstanding balance, commitment fees on undrawn amounts, and the amortization of deferred financing costs.

Our PWB Credit Facility is a $15.0 million revolving line of credit, of which $-0- was drawn as of June 30, 2021. As of June 30, 2021, the unfunded commitment under the PWB Credit Facility was $15.0 million, that is available, subject to a borrowing base and other covenants. As of June 30, 2021, we were in compliance with the applicable covenants under the PWB Credit Facility.

On February 17, 2021, we amended the BLA to among other things: (i) increase the maximum amount available under the PWB Credit Facility from $10.0 million to $15.0 million; (ii) decrease the interest rate floor from 5.50% per annum to 5.25% per annum; (iii) restrict the transfer of certain assets to our subsidiaries or incurrence of debt by, or the encumbrance of assets of our subsidiaries; and (iv) extend the maturity date from February 28, 2021 to February 28, 2023.

Unsecured Note. On November 27, 2019, we entered into an agreement with a qualified institutional investor ("Note Purchase Agreement") pursuant to which we issued the Unsecured Note. The purchase price of the Unsecured Note was $14,700,000 after deducting the offering price discount. The Unsecured Note has a fixed interest rate of 6.50% and is due on November 27, 2024, unless redeemed, purchased or prepaid prior to such date by us or our affiliates in accordance with its terms. Redemption of the Unsecured Note prior to November 27, 2021 will require a 1.0% prepayment fee. Interest on the Unsecured Note is due quarterly. In addition,we are obligated to repay the Unsecured Note at par if certain change in control events occur. The Unsecured Note is a general unsecured obligation that ranks pari passu with all outstanding and future unsecured unsubordinated indebtedness we may issue.

The Note Purchase Agreement contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of our status as a business development company within the meaning of the 1940 Act, and minimum asset coverage ratio. The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, certain judgments and orders, and certain events of bankruptcy. As of June 30, 2021, we were in compliance with the applicable covenants under the Note Purchase Agreement.

As of June 30, 2021, the Unsecured Note had the following terms and balances:


	Principal		Unamortized Discount and Issuance Costs		Stated Interest Rate		Effective Interest Rate (1)		Maturity	2021 Interest Expense (2)
Unsecured Note	$	15,000,000	$	244,800	6.50	%	6.99	%	11/27/24	$	523,566

(1) The effective interest rate on the Unsecured Note includes deferred debt issuance cost amortization.

(2) Interest expense includes debt issuance costs amortization of $36,066 for the six months ended June 30, 2021.

Other Liquidity Matters

We expect to fund the growth of our investment portfolio through the private placement of our common shares and issuances of senior securities or future borrowings to the extent permitted by the 1940 Act. We cannot assure stockholders that our plans to raise capital will be successful. In addition, we intend to distribute to our stockholders substantially all of our taxable income in order to satisfy the requirements applicable to RICs under Subchapter M of the Code. Consequently, we may not have the ability to fund new investments or make additional investments in our portfolio companies. The illiquidity of our portfolio investments may make it difficult for us to sell these investments when desired and, if we are required to sell these investments, we may realize significantly less than their recorded value.

As a BDC, we generally will be required to meet a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities, which include all of any borrowings or outstanding preferred stock of at least 200% (or 150% if certain requirements are met). This requirement limits the amount that we may borrow. To fund growth in our investment portfolio in the future, we anticipate needing to raise additional capital from various sources, including the equity markets and the securitization or other debt-related markets, which may or may not be available on favorable terms, if at all. Effective November 6, 2019, the asset coverage ratio test applicable to us was reduced from 200% to 150%.

As of June 30, 2021, the aggregate amount of senior securities outstanding was $15.0 million, for which our asset coverage was 281%. The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our

consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness.

In addition, as a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our assets, as defined by the 1940 Act, are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the relevant SEC rules, the term “eligible portfolio company” includes all private companies, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million, in each case organized in the United States. Conversely, we may invest up to 30% of our portfolio in opportunistic investments not otherwise eligible under BDC regulations. Specifically, as part of this 30% basket, we may consider investments in investment funds that are operating pursuant to certain exceptions to the 1940 Act and in advisers to similar investment funds, as well as in debt or equity of middle-market portfolio companies located outside of the United States and debt and equity of public companies that do not meet the definition of eligible portfolio companies because their market capitalization of publicly traded equity securities exceeds the levels provided for in the 1940 Act. As of June 30, 2021, approximately 87% of our investments were qualifying assets.

Contractual Obligations

We, with approval of our Board, entered into the Investment Advisory Agreement, the ESAs, the Sub-Advisory Agreement, and the Administration Agreement. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 3."

The following table shows our contractual obligations as of June 30, 2021:


	Payments due by period
Contractual Obligation	Total		Less than year		1-3 years		3-5 years		After 5 years
PWB Credit Facility (1)	$	—	$	—	$	—	$	—	$	—
Unsecured Note (2)	15,000,000		—		—		15,000,000		—
Total	$	15,000,000	$	—	$	—	$	15,000,000	$	—

(1) The PWB Credit Facility is scheduled to mature on February 28, 2023.

(2) The Unsecured Note is scheduled to mature on November 27, 2024.

We continue to believe our long-dated financing, with all of our total debt contractually maturing in

2024, affords us operational flexibility.

Off-Balance Sheet Arrangements

Amounts Conditionally Reimbursable to OFS Advisor. The Advisors have incurred organizational and offering costs and Contractual Issuer Expenses, of which $589,035 and $672,129 were unreimbursed as of June 30, 2021 and December 31, 2020, respectively. We remain conditionally liable for organization and offering costs incurred by the Advisors on our behalf. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 3."

Pursuant to the terms of the Sub-Advisory Agreement, beginning August 3, 2020, CIM Capital assumed responsibility for bearing costs relating to the Offering.

The Advisors have provided aggregate operating expense support of $3,727,151 and $3,898,820 as of June 30, 2021 and December 31, 2020, respectively. We remain conditionally liable for operating expense support provided by the Advisors. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 3."

On August 3, 2020, the Expense Support Agreement was amended to, among other things, require CIM Capital to pay future expense support payments on behalf of us.

Unfunded Commitments. We may become a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. We had $1,661,755 of total unfunded commitments to seven portfolio companies at June 30, 2021. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 6."

Distributions

We have elected to be taxed as a RIC under Subchapter M of the Code. In order to maintain our status as a RIC, we are required to distribute annually to our stockholders at least 90% of our ICTI, as defined by the Code. Additionally, to avoid a 4% excise tax on undistributed earnings we are required to distribute each calendar year the sum of (i) 98% of our ordinary income

for such calendar year (ii) 98.2% of our net capital gains for the one-year period ending October 31 of that calendar year, and (iii) any income recognized, but not distributed, in preceding years and on which we paid no federal income tax. Maintenance of our RIC status also requires adherence to certain source of income and asset diversification requirements. Generally, a RIC is entitled to deduct dividends it pays to its stockholders from its income to determine “taxable income.” Taxable income includes our taxable interest, dividend and fee income, and taxable net capital gains. Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as gains or losses are not included in taxable income until they are realized. In addition, gains realized for financial reporting purposes may differ from gains included in taxable income as a result of our election to recognize gains using installment sale treatment, which generally results in the deferment of gains for tax purposes until notes or other amounts, including amounts held in escrow, received as consideration from the sale of investments are collected in cash. Taxable income includes non-cash income, such as changes in accrued and reinvested interest and dividends, which includes contractual PIK interest, and the amortization of discounts and fees. Cash collections of income resulting from contractual PIK interest and dividends or the amortization of discounts and fees generally occur upon the repayment of the loans or debt securities that include such items. Non-cash taxable income is reduced by non-cash expenses, such as realized losses and depreciation, and amortization expense.

We do not currently qualify as a “publicly offered regulated investment company,” as defined in the Code. Accordingly, stockholders will be taxed as though they received a distribution of some of the our expenses. A “publicly offered regulated investment company” is a RIC whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market, or (iii) held by at least 500 persons at all times during the taxable year. We anticipate that we will not qualify as a publicly offered RIC for the 2020 tax year, and we cannot determine when we will qualify as a publicly offered RIC. Since we are not a publicly offered RIC, a non-corporate stockholder’s allocable portion of our affected expenses, including a portion of our management fees, will be treated as an additional distribution to the stockholder. A non-corporate stockholder’s allocable portion of these expenses are treated as miscellaneous itemized deductions that are not currently deductible by such stockholders.

Our Board maintains a variable dividend policy with the objective of distributing four quarterly distributions in an amount not less than 90-100% of our taxable quarterly income or potential annual income for a particular year. In addition, at the end of the year, we may also pay an additional special dividend, or fifth dividend, such that we may distribute approximately all of our annual taxable income in the year it was earned, while maintaining the option to spill over our excess taxable income to a following year. Each year, a statement on Form 1099-DIV identifying the source of the distribution is mailed to the Company’s stockholders.

Our distributions through June 30, 2020, were funded through expense limitation payments by OFS Advisor under the Prior Expense Support Agreement and, and our distributions may in the future, be funded through expense limitation payments by CIM Capital under the Expense Support Agreement. The Expense Support Agreement is designed to ensure no portion of our distribution to stockholders will be paid from Offering proceeds, and provides for expense limitation payments to us in any quarterly period our cumulative distributions to stockholders exceeds the Company's cumulative ICTI and net realized gains. Any such distributions funded through expense limitation payments are not based on our investment performance, and can only be sustained if we achieve positive investment performance in future periods and/or CIM Capital continues to make such payments. The Expense Support Agreement may be terminated by us or CIM Capital, without payment of any penalty, upon written notice to us.

Share Repurchases

Since November 6, 2018, the Board has approved quarterly tender offers to purchase shares of our outstanding common stock. Since November 2019, we have conducted quarterly tender offers to purchase, in each case, 2.5% of the weighted average number of shares of the outstanding common stock for the trailing 12-month period. The repurchase offers allowed our stockholders to sell their shares back to us at a price equal to the most recently disclosed net asset value per share of our common stock immediately prior to the date of repurchase. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 10" for details on share repurchases.

Recent Developments

On July 27, 2021, our Board declared a distribution of $0.0846 per common share, payable on October 15, 2021, to stockholders of record on July 28, 2021.

On August 10, 2021, our Board approved a tender offer, commencing on August 27, 2021, to purchase 2.5% of the weighted average number of shares of the outstanding Common Stock for the trailing 12-month period ending June 30, 2021.

We evaluated events subsequent to March 31, 2021 through August 12, 2021. We are continuing to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, including how it impacts our portfolio companies, employees, due diligence and underwriting processes, and financial markets. The U.S. capital markets experienced extreme

volatility and disruption following the outbreak of the COVID-19 pandemic, which appear to have subsided and returned to pre-COVID-19 levels. Nonetheless, certain economists and major investment banks have expressed concern that the continued spread of the virus globally could lead to a prolonged period of world-wide economic downturn.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risks reported in our Annual Report on Form 10-K for the year ended December 31, 2020. In a prolonged low interest rate environment, including a reduction of LIBOR to zero, our net interest margin will be compressed and adversely affect our operating results.

Our outstanding Unsecured Note bears interest at a fixed rate. Our PWB Credit Facility has a floating interest rate provision based on the Prime Rate with a 5.25% interest rate floor, which resulted in an stated interest rate of 5.25% as of June 30, 2021. Assuming that the interim, unaudited Statement of Assets and Liabilities as of June 30, 2021 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates:


Basis point increase	Interest income		Interest expense	Net increase in net investment income
25	$	4,065	_(1)	$	4,065
50	8,384		_	8,384
75	16,093		_	16,093
100	58,178		_	58,178
125	131,829		_	131,829


Basis point decrease(1)	Interest income		Interest expense	Net decrease in net investment income
25	$	(2,244)	_	$	(2,244)

(1) Increases or decreases in LIBOR beyond that presented would not result in a change to interest income or interest expense due to current LIBOR rates and a minimum base rate, or floor, that our debt investments and the PWB Credit Facility contain.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2021. The term “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of the Company’s disclosure controls and procedures as of June 30, 2021, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended June 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We, OFS Advisor and OFS Services, are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings incidental to the normal course of our business, including the enforcement of our rights under contracts with our portfolio companies. Furthermore, third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 1A. Risk Factors

Investing in our common stock may be speculative and involves a high degree of risk. In addition to the other information contained in this Quarterly Report on Form 10-Q, including our financial statements, and the related notes, schedules and exhibits, you should carefully consider the risk factors described in "Part I – Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and in "Part II, Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K and Quarterly Report on Form 10-Q are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Other than the risks described below, there have been no material changes from the risk factors previously disclosed in "Part I – Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. The risks previously disclosed in our Annual Report on Form 10-K and Quarterly Report on Form 10-Q should be read together with the other information disclosed elsewhere in this Quarterly Report on Form 10-Q and our other reports filed with the SEC.

The interest rates of our loans to our portfolio companies that extend beyond 2021 might be subject to change based on recent regulatory changes, including the decommissioning of LIBOR.

LIBOR is the basic rate of interest used in lending transactions between banks on the London interbank market and is widely used as a reference for setting the interest rate on loans globally. We typically use LIBOR as a reference rate in loans we extend to portfolio companies such that the interest due to us pursuant to a loan extended to a portfolio company is calculated using LIBOR. The terms of our debt investments generally include minimum interest rate floors which are calculated based on LIBOR.

On March 5, 2021, the United Kingdom's Financial Conduct Authority (the “FCA”), which regulates LIBOR, announced that it will not compel panel banks to contribute to the overnight 1, 3, 6 and 12 months U.S. LIBOR tenors after June 30, 2023 and all other tenors after December 31, 2021. It is unclear if at that time LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. Central banks and regulators in a number of major jurisdictions (for example, United States, United Kingdom, European Union, Switzerland and Japan) have convened working groups to find, and implement the transition to, suitable replacements for interbank offered rates (“IBORs”). To identify a successor rate for U.S. dollar LIBOR, the Alternative Reference Rates Committee (“ARRC”), a U.S.-based group convened by the U.S. Federal Reserve Board and the Federal Reserve Bank of New York, was formed. On July 29, 2021, the ARRC formally recommended the Secured Overnight Financing Rate (“SOFR”) as its preferred replacement rate for LIBOR. SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S. Treasury securities, and is based on directly observable U.S. Treasury-backed repurchase transactions. Although SOFR appears to be the preferred replacement rate for U.S. dollar LIBOR, at this time, it is not possible to predict the effect of any such changes, any establishment of alternative reference rates or other reforms to LIBOR that may be enacted in the United States, United Kingdom or elsewhere or, whether the COVID-19 outbreak will have further effect on LIBOR transition plans.

The elimination of LIBOR or any other changes or reforms to the determination or supervision of LIBOR could have an adverse impact on the market value of and/or transferability of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us or on our overall financial condition or results of operations.

Recently, the CLOs we have invested in have included, or have been amended to include, language permitting the CLO investment manager to implement a market replacement rate (like those proposed by the ARRC of the Federal Reserve Board and the Federal Reserve Bank of New York) upon the occurrence of certain material disruption events. However, we cannot ensure that all CLOs in which we are invested will have such provisions, nor can we ensure the CLO investment

managers will undertake the suggested amendments when able. We believe that because CLO managers and other CLO market participants have been preparing for an eventual transition away from LIBOR, we do not anticipate such a transition to have a material impact on the liquidity or value of any of our LIBOR-referenced CLO investments. However, because the future of LIBOR at this time is uncertain and the specific effects of a transition away from LIBOR cannot be determined with certainty as of the date of this filing, a transition away from LIBOR could:

• adversely impact the pricing, liquidity, value of, return on and trading for a broad array of financial products, including any LIBOR-linked CLO investments;

• require extensive changes to documentation that governs or references LIBOR or LIBOR-based products, including, for example, pursuant to time-consuming renegotiations of existing documentation to modify the terms of outstanding investments;

• result in inquiries or other actions from regulators in respect of our preparation and readiness for the replacement of LIBOR with one or more alternative reference rates;

• result in disputes, litigation or other actions with CLO investment managers, regarding the interpretation and enforceability of provisions in our LIBOR-based CLO investments, such as fallback language or other related provisions, including, in the case of fallbacks to the alternative reference rates, any economic, legal, operational or other impact resulting from the fundamental differences between LIBOR and the various alternative reference rates;

• require the transition and/or development of appropriate systems and analytics to effectively transition our risk management processes from LIBOR-based products to those based on one or more alternative reference rates, which may prove challenging given the limited history of the proposed alternative reference rates; and

• cause us to incur additional costs in relation to any of the above factors.

In addition, the effect of a phase out of LIBOR on U.S. senior secured loans, the underlying assets of the CLOs in which we invest, is currently unclear. To the extent that any replacement rate utilized for senior secured loans differs from that utilized for a CLO that holds those loans, the CLO would experience an interest rate mismatch between its assets and liabilities which could have an adverse impact on our net investment income and portfolio returns.

Many underlying corporate borrowers can elect to pay interest based on 1-month LIBOR, 3-month LIBOR and/or other rates in respect of the loans held by CLOs in which we are invested, in each case plus an applicable spread, whereas CLOs generally pay interest to holders of the CLO’s debt tranches based on 3-month LIBOR plus a spread. The 3-month LIBOR currently exceeds the 1-month LIBOR by a historically high amount, which may result in many underlying corporate borrowers electing to pay interest based on 1-month LIBOR. This mismatch in the rate at which CLOs earn interest and the rate at which they pay interest on their debt tranches negatively impacts the cash flows on a CLO’s equity tranche, which may in turn adversely affect our cash flows and results of operations. Unless spreads are adjusted to account for such increases, these negative impacts may worsen as the amount by which the 3-month LIBOR exceeds the 1-month LIBOR increases.

The senior secured loans underlying the CLOs in which we invest typically have floating interest rates. A rising interest rate environment may increase loan defaults, resulting in losses for the CLOs in which we invest. In addition, increasing interest rates may lead to higher prepayment rates, as corporate borrowers look to avoid escalating interest payments or refinance floating rate loans. Further, a general rise in interest rates will increase the financing costs of the CLOs. However, since many of the senior secured loans within CLOs have LIBOR floors, if LIBOR is below the average LIBOR floor, there may not be corresponding increases in investment income resulting in smaller distributions to equity investors in these CLOs.

We cannot predict how new tax legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business.

Legislative or other actions relating to taxes could have a negative effect on us. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury Department. The Biden Administration has proposed significant changes to the existing U.S. tax rules, and there are a number of proposals in Congress that would similarly modify the existing U.S. tax rules. The likelihood of any such legislation being enacted is uncertain, but new legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and negatively affect our ability to qualify for tax treatment as a RIC or the U.S. federal income tax consequences to us and our investors of such qualification, or could have other adverse consequences. Investors are urged to consult with their tax advisor regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our common stock.

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

During the three month period ended June 30, 2021, we sold 17,718 shares of our common stock for gross proceeds of $250,000, or a weighted average price of $14.11 per share, to investors who participated in the Offering and each of whom met the criteria of an “accredited investor” as defined in Rule 501 of Regulation D under the Securities Act.

The offer and sale of the Company’s common stock in the Offering was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of, and Rule 506 of Regulation D under, the Securities Act.

Because shares of our common stock have been acquired by investors in one or more transactions "not involving a public offering," they are "restricted securities" and may be required to be held indefinitely. Our common stock may not be sold, transferred, assigned, pledged or otherwise disposed of unless: (i) the transferor provides OFS Advisor with at least 10 days written notice of the transfer; (ii) the transfer is made in accordance with applicable securities laws; and (iii) the transferee agrees in writing to be bound by these restrictions and the other restrictions imposed on the common stock and to execute such other instruments or certifications as are reasonably required by us. Accordingly, an investor must be willing to bear the economic risk of investment in the common stock until we are liquidated. No sale, transfer, assignment, pledge or other disposition, whether voluntary or involuntary, of the common shares may be made except by registration of the transfer on our books.

The following table summarizes the common stock repurchases by us for the six months ended June 30, 2021 and 2020, respectively:


	Number of Shares	Amount
Six months ended June 30, 2020
January 1, 2020 through April 3, 2020 (1)	32,622	$	364,384
April 4, 2020 through June 30, 2020	53,665	654,713

Six months ended June 30, 2021
January 1, 2021 through April 5, 2021(2)	55,377	$	708,272
April 6, 2021 through June 30, 2021	55,016	700,354

(1)The February 21, 2020 tender offer that was originally schedule to expire on March 27, 2020, was amended to extend the offer period to April 3, 2020.

(2) The February 19, 2021 tender offer that was originally schedule to expire on March 26, 2021, was amended to extend the offer period to April 5, 2021.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Listed below are the exhibits that are filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K):

Incorporated by Reference

Exhibit
Number

Description

Form and SEC File No.

Filing Date with SEC

Filed with this 10-Q

11.1

Computation of Per Share Earnings

14.1

Joint Code of Ethics of Hancock Park Corporate Income, Inc. and OFS Advisor

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 Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

†

32.2

Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

†


+			Included in the statements of operations contained in this report
*			Filed herewith.
†			Furnished 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.


Dated: August 13, 2021	HANCOCK PARK CORPORATE INCOME, INC.

	By:	/s/ Bilal Rashid
	Name:	Bilal Rashid
	Title:	Chief Executive Officer

	By:	/s/ Jeffrey A. Cerny
	Name:	Jeffrey A. Cerny
	Title:	Chief Financial Officer

Hancock Park Corporate Income, Inc. - FORM 10-Q - August 13, 2021

Attached files

Hancock Park Corporate Income, Inc. Reports