Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

v3.24.1.u1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
The Company’s commitments and contingencies consist primarily of unfunded commitments to extend credit in the form of loans to the Company’s portfolio companies. As of March 31, 2024, a portion of these unfunded contractual commitments are dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, the Company’s credit agreements with its portfolio companies generally contain customary lending provisions which allow the Company relief from funding obligations for previously made unfunded commitments in instances where the underlying portfolio company experiences materially adverse events that affect the financial condition or business outlook for the portfolio company. Since a portion of these commitments may expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure of unfunded contractual commitments includes only those which are available at the request of the portfolio company and unencumbered by future or unachieved milestones.
As of March 31, 2024, and December 31, 2023, the Company had approximately $483.4 million and $335.3 million, respectively, of available unfunded commitments, including undrawn revolving facilities, which were available at the request of the portfolio company and unencumbered by future or unachieved milestones. In order to draw a portion of the Company's available unfunded commitments, a portfolio company must submit to the Company a formal funding request that complies with the applicable advance notice and other operational requirements. The amounts disclosed exclude unfunded commitments (i) for which, with respect to a portfolio company's agreement, a milestone was achieved after the last day on which the portfolio company could have requested a drawdown funding to be completed within the reporting
period; and (ii) related to the portion of portfolio company investments assigned to or directly committed by the Adviser Funds as described in “Note -12 Related Party Transactions”. The fair value of the Company’s unfunded commitments is considered to be immaterial as the yield determined at the time of underwriting is expected to be materially consistent with the yield upon funding, given that interest rates are generally pegged to market indices and given the existence of milestones, conditions and/or obligations embedded in the borrowing agreements.
As of March 31, 2024, and December 31, 2023, the Company’s unfunded contractual commitments available at the request of the portfolio company, including undrawn revolving facilities, and unencumbered by milestones were as follows:
(in thousands)
Unfunded Commitments (1) as of
Portfolio Company March 31, 2024 December 31, 2023
Debt Investments:    
Madrigal Pharmaceutical, Inc. $ 51,000  $ — 
Thumbtack, Inc. 30,000  40,000 
Automation Anywhere, Inc. 29,400  29,400 
Axsome Therapeutics, Inc. 25,375  — 
Checkr Group, Inc. 23,625  23,625 
Skydio, Inc. 22,500  22,500 
HilleVax, Inc. 20,000  — 
Shield AI, Inc. 18,750  — 
Strive Health Holdings, LLC 18,000  — 
TG Therapeutics, Inc. 16,250  — 
Phathom Pharmaceuticals, Inc. 15,300  6,120 
Dragos 13,000  13,000 
Suzy, Inc. 12,000  12,000 
Harness, Inc. 11,550  — 
Main Street Rural, Inc. 10,500  10,500 
Tipalti Solutions Ltd. 10,500  10,500 
Armis, Inc. 10,000  — 
Marathon Health, LLC 10,000  — 
Next Insurance, Inc. 10,000  10,000 
Curana Health Holdings, LLC 8,412  — 
Curevo, Inc. 7,500  — 
Elation Health, Inc. 7,500  7,500 
ATAI Life Sciences N.V. 7,000  — 
Reveleer 6,775  — 
Modern Life, Inc. 6,500  6,500 
Dronedeploy, Inc. 6,250  6,250 
Brain Corporation 5,000  5,000 
Babel Street 4,367  3,375 
Heron Therapeutics, Inc. 4,000  4,000 
Leapwork ApS 3,900  3,900 
Saama Technologies, LLC 3,875  3,875 
Zimperium, Inc. 3,727  3,727 
Allvue Systems, LLC 3,590  3,590 
Altumint, Inc. 3,500  2,500 
Sight Sciences, Inc. 3,500  — 
Riviera Partners LLC 3,000  3,000 
Plentific Ltd 2,625  2,625 
Zappi, Inc. 2,571  2,571 
Loftware, Inc. 2,277  2,277 
Yipit, LLC 2,250  2,250 
Streamline Healthcare Solutions 2,200  2,200 
New Relic, Inc. 2,176  2,176 
Cutover, Inc. 2,150  2,650 
(in thousands)
Unfunded Commitments (1) as of
Portfolio Company March 31, 2024 December 31, 2023
Debt Investments:
Dashlane, Inc. $ 2,137  $ 2,137 
Sumo Logic, Inc. 2,000  2,000 
Ceros, Inc. 1,707  1,707 
ThreatConnect, Inc. 1,600  1,600 
LogicSource 1,209  1,209 
Ikon Science Limited 1,050  1,050 
LinenMaster, LLC 1,000  1,000 
Fortified Health Security 840  840 
Agilence, Inc. 800  800 
Omeda Holdings, LLC 731  731 
3GTMS, LLC 698  1,182 
Flight Schedule Pro, LLC 639  639 
Dispatch Technologies, Inc. 625  625 
Constructor.io Corporation 625  625 
Cybermaxx Intermediate Holdings, Inc. 390  390 
ShadowDragon, LLC 333  333 
Cytracom Holdings LLC 72  72 
Tarsus Pharmaceuticals, Inc. —  20,625 
Kura Oncology, Inc. —  19,250 
Akero Therapeutics, Inc. —  15,000 
Senseonics Holdings, Inc. —  8,750 
Annex Cloud —  1,750 
Enmark Systems, Inc. —  457 
Alchemer LLC —  445 
Total Unfunded Debt Commitments: 478,851  330,828 
     
Investment Funds & Vehicles:(2)
   
Forbion Growth Opportunities Fund I C.V. 1,757  1,757 
Forbion Growth Opportunities Fund II C.V. 2,748  2,748 
Total Unfunded Commitments in Investment Funds & Vehicles: 4,505  4,505 
     
Total Unfunded Commitments $ 483,356  $ 335,333 
(1)For debt investments, amounts represent unfunded commitments, including undrawn revolving facilities, which are available at the request of the portfolio company. Amount excludes unfunded commitments which are unavailable due to the borrower having not met certain milestones. These amounts also exclude $156.0 million and $127.7 million of unfunded commitments as of March 31, 2024, and December 31, 2023, respectively, to portfolio companies related to loans assigned to or directly committed by the Adviser Funds as described in “Note -12 Related Party Transactions”.
(2)For investment funds and vehicles, the amount represents uncalled capital commitments in private equity funds.
The following table provides additional information on the Company’s unencumbered unfunded commitments regarding milestones, expirations and type:
(in thousands)
Unfunded Commitments
March 31, 2024 December 31, 2023
Expiring during:
2024 $ 377,101  $ 291,896 
2025 44,182  3,004 
2026 18,630  7,537 
2027 15,070  14,078 
2028 6,102  6,547 
2029 13,590  3,590 
2030 4,176  4,176 
Total Unfunded Debt Commitments 478,851  330,828 
     
Unfunded Commitments in Investment Funds & Vehicles:    
Expiring during:    
2030 1,757  1,757 
2032 2,748  2,748 
Total Unfunded Commitments in Investment Funds & Vehicles 4,505  4,505 
Total Unfunded Commitments $ 483,356  $ 335,333 
The following tables provide the Company’s contractual obligations as of March 31, 2024 and December 31, 2023:
As of March 31, 2024: Payments due by period (in thousands)
Contractual Obligations (1)
Total Less than 1 year 1 - 3 years 3 - 5 years After 5 years
Debt (2)(3)
$ 1,766,000  $ 155,000  $ 1,246,000  $ —  $ 365,000 
Lease and License Obligations (4)
26,181  2,619  6,658  6,281  10,623 
Total $ 1,792,181  $ 157,619  $ 1,252,658  $ 6,281  $ 375,623 
 
As of December 31, 2023: Payments due by period (in thousands)
Contractual Obligations (1)
Total Less than 1 year 1 - 3 years 3 - 5 years After 5 years
Debt (5)(3)
$ 1,570,000  $ 105,000  $ 689,000  $ 411,000  $ 365,000 
Lease and License Obligations (4)
26,741  2,539  6,629  6,248  11,325 
Total $ 1,596,741  $ 107,539  $ 695,629  $ 417,248  $ 376,325 
(1)Excludes commitments to extend credit to the Company’s portfolio companies and uncalled capital commitments in investment funds.
(2)Includes $175.0 million in principal outstanding under the SBA Debentures, $105.0 million of the July 2024 Notes, $50.0 million of the February 2025 Notes, $70.0 million of the June 2025 Notes, $50.0 million of the June 2025 3-Year Notes, $50.0 million of the March 2026 A Notes, $50.0 million of the March 2026 B Notes, $150.0 million of the 2031 Asset-Backed Notes, $40.0 million of the 2033 Notes, $325.0 million of the September 2026 Notes and $350.0 million of the January 2027 Notes as of March 31, 2024. There was also $215.0 million outstanding under the SMBC Facility and $136.0 million outstanding under the MUFG Bank Facility as of March 31, 2024.
(3)Amounts represent future principal repayments and not the carrying value of each liability. See “Note 5 – Debt”.
(4)Facility leases and licenses including short-term leases.
(5)Includes $175.0 million in principal outstanding under the SBA Debentures, $105.0 million of the July 2024 Notes, $50.0 million of the February 2025 Notes, $70.0 million of the June 2025 Notes, $50.0 million of the June 2025 3-Year Notes, $50.0 million of the March 2026 A Notes, $50.0 million of the March 2026 B Notes, $150.0 million of the 2031 Asset-Backed Notes, $40.0 million of the 2033 Notes, $325.0 million of the September 2026 Notes and $350.0 million of the January 2027 Notes as of December 31, 2023. There was also $94.0 million outstanding under the SMBC Facility and $61.0 million outstanding under the MUFG Bank Facility as of December 31, 2023.
Certain premises are leased or licensed under agreements which expire at various dates through July 2034. For the three months ended March 31, 2024 and 2023, total rent expense, including short-term leases, amounted to approximately $1.0 million and $0.8 million, respectively. The Company recognizes an operating lease liability and a ROU asset for all leases, with the exception of short-term leases. The lease payments on short-term leases are recognized as rent expense on a straight-line basis. The discount rate applied to measure each ROU asset and lease liability is based on the Company’s incremental weighted average cost of debt. The Company considers the general economic environment and its credit rating and factors in various financing and asset specific adjustments to ensure the discount rate applied is appropriate to the intended use of the underlying lease. While some of the leases contained options to extend and terminate, it is not reasonably certain that either option will be utilized and therefore, only the payments in the initial term of the leases were included in the lease liability and ROU asset.
The following table sets forth information related to the measurement of the Company’s operating lease liabilities and supplemental cash flow information related to operating leases as of March 31, 2024, and 2023:
(in thousands) Three Months Ended March 31, 2024 Three Months Ended March 31, 2023
Total operating lease cost $ 533  $ 698 
Cash paid for amounts included in the measurement of lease liabilities $ 122  $ 609 
  As of March 31, 2024 As of December 31, 2023
Weighted-average remaining lease term (in years) 8.43 8.68
Weighted-average discount rate 6.79  % 6.79  %
The following table shows future minimum lease payments under the Company’s operating leases and a reconciliation to the operating lease liability as of March 31, 2024:
(in thousands) As of March 31, 2024
2024 $ 1,803 
2025 3,268 
2026 3,362 
2027 3,483 
Thereafter 14,090 
Total lease payments 26,006 
Less: imputed interest & other items (6,607)
Total operating lease liability $ 19,399 
The Company may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, the Company does not expect any current matters will materially affect the Company’s financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on the Company’s financial condition or results of operations in any future reporting period.