Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

v3.23.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2023
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 September 30, 2023, 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 September 30, 2023, and December 31, 2022, the Company had approximately $400.6 million and $628.9 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 September 30, 2023, and December 31, 2022, 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 September 30, 2023 December 31, 2022
Debt Investments:    
Thumbtack, Inc. $ 40,000  $ 40,000 
Automation Anywhere, Inc. 29,400  29,400 
Axsome Therapeutics, Inc. 25,375  21,000 
Checkr Group, Inc. 23,625  — 
Skydio, Inc. 22,500  22,500 
Tarsus Pharmaceuticals, Inc. 20,625  10,313 
Phathom Pharmaceuticals, Inc. 16,625  66,500 
Carwow LTD 14,365  — 
Dragos 13,000  — 
Locus Robotics Corp. 12,391  — 
PathAI, Inc. 12,000  12,000 
Suzy, Inc. 12,000  — 
Main Street Rural, Inc. 10,500  — 
Tipalti Solutions Ltd. 10,500  — 
Alamar Biosciences, Inc. 10,000  10,000 
Aryaka Networks, Inc. 10,000  20,000 
Next Insurance, Inc. 10,000  — 
Elation Health, Inc. 7,500  7,500 
Gritstone Bio, Inc. 7,500  7,500 
Nuvolo Technologies Corporation 6,800  5,970 
Dronedeploy, Inc. 6,250  12,500 
Akero Therapeutics, Inc. 5,000  5,000 
Brain Corporation 5,000  20,700 
Leapwork ApS 4,100  — 
Geron Corporation 3,900  — 
Saama Technologies, LLC 3,875  — 
Zimperium, Inc. 3,727  1,088 
Allvue Systems, LLC 3,590  — 
Riviera Partners LLC 3,500  3,500 
Babel Street 3,375  3,375 
Modern Life, Inc. 3,250  — 
Loftware, Inc. 2,846  — 
Cutover, Inc. 2,650  1,000 
Zappi, Inc. 2,571  2,571 
Yipit, LLC 2,250  2,250 
Streamline Healthcare Solutions 2,200  — 
Sumo Logic, Inc. 2,000  — 
Viridian Therapeutics, Inc. 2,000  12,000 
3GTMS, LLC 1,759  — 
(in thousands)
Unfunded Commitments (1) as of
Portfolio Company September 30, 2023 December 31, 2022
Debt Investments:
Ceros, Inc. $ 1,707  $ 1,707 
ThreatConnect, Inc. 1,600  1,600 
RVShare, LLC 1,500  1,500 
Signal Media Limited 1,500  5,250 
Onna Technologies, Inc. 1,275  — 
LogicSource 1,209  1,209 
Ikon Science Limited 1,050  1,050 
LinenMaster, LLC 1,000  — 
Fortified Health Security 840  840 
Omeda Holdings, LLC 825  938 
Agilence, Inc. 800  800 
Dispatch Technologies, Inc. 750  1,250 
Flight Schedule Pro, LLC 639  639 
Constructor.io Corporation 625  625 
Enmark Systems, Inc. 457  457 
Alchemer LLC 445  890 
Cybermaxx Intermediate Holdings, Inc. 390  390 
ShadowDragon, LLC 333  333 
Cytracom Holdings LLC 72  225 
Provention Bio, Inc. —  40,000 
Vida Health, Inc. —  40,000 
Madrigal Pharmaceutical, Inc. —  34,000 
Oak Street Health, Inc. —  33,750 
HilleVax, Inc. —  28,000 
Replimune Group, Inc. —  20,700 
G1 Therapeutics, Inc. —  19,375 
Alladapt Immunotherapeutics Inc. —  15,000 
AppDirect, Inc. —  15,000 
Dashlane, Inc. —  10,000 
Fever Labs, Inc. —  8,333 
Kura Oncology, Inc. —  8,250 
Fulfil Solutions, Inc. —  5,000 
Demandbase, Inc. —  3,750 
MacroFab, Inc. —  3,000 
Khoros (p.k.a Lithium Technologies) —  1,812 
Mobile Solutions Services —  495 
Annex Cloud —  386 
Total Unfunded Debt Commitments: 395,566  623,221 
     
Investment Funds & Vehicles:(2)
   
Forbion Growth Opportunities Fund I C.V. 2,269  2,842 
Forbion Growth Opportunities Fund II C.V. 2,748  2,811 
Total Unfunded Commitments in Investment Funds & Vehicles: 5,017  5,653 
     
Total Unfunded Commitments $ 400,583  $ 628,874 
(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 $135.7 million and $173.5 million of unfunded commitments as of September 30, 2023, and December 31, 2022, 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) September 30, 2023 December 31, 2022
Unfunded Debt Commitments:
Expiring during:
2023 $ 123,031  $ 461,296 
2024 234,164  134,856 
2025 1,831  720 
2026 9,037  9,038 
2027 14,672  15,171 
2028 7,241  2,140 
2029 3,590  — 
2030 2,000  — 
Total Unfunded Debt Commitments 395,566  623,221 
     
Unfunded Commitments in Investment Funds & Vehicles:    
Expiring during:    
2030 2,269  2,842 
2032 2,748  2,811 
Total Unfunded Commitments in Investment Funds & Vehicles 5,017  5,653 
Total Unfunded Commitments $ 400,583  $ 628,874 
The following tables provide the Company’s contractual obligations as of September 30, 2023 and December 31, 2022:
As of September 30, 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 (2)(3)
$ 1,649,000  $ 105,000  $ 595,000  $ 584,000  $ 365,000 
Lease and License Obligations (4)
27,693  3,054  6,606  6,218  11,815 
Total $ 1,676,693  $ 108,054  $ 601,606  $ 590,218  $ 376,815 
 
As of December 31, 2022: 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)
$ 1,594,000  $ —  $ 382,000  $ 847,000  $ 365,000 
Lease and License Obligations (4)
8,641  2,723  2,259  2,452  1,207 
Total $ 1,602,641  $ 2,723  $ 384,259  $ 849,452  $ 366,207 
(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 September 30, 2023. There was also $173.0 million outstanding under the SMBC Facility and $61.0 million outstanding under the MUFG Bank Facility as of September 30, 2023.
(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, 2022. There was also $72.0 million outstanding under the SMBC Facility and $107.0 million outstanding under the MUFG Bank Facility as of December 31, 2022.
Certain premises are leased or licensed under agreements which expire at various dates through March 2034. For the three and nine months ended September 30, 2023, total rent expense, including short-term leases, amounted to approximately $0.9 million and $2.5 million, respectively. For the three and nine months ended September 30, 2022, total rent expense, including short-term leases, amounted to approximately $0.8 million and $2.4 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 September 30, 2023, and 2022:
(in thousands) Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
Total operating lease cost $ 691  $ 744  $ 1,995  $ 2,185 
Cash paid for amounts included in the measurement of lease liabilities $ 495  $ 642  $ 2,231  $ 2,411 
  As of September 30, 2023 As of December 31, 2022
Weighted-average remaining lease term (in years) 8.61 5.48
Weighted-average discount rate 6.79  % 5.37  %
The following table shows future minimum lease payments under the Company’s operating leases and a reconciliation to the operating lease liability as of September 30, 2023:
(in thousands) As of September 30, 2023
2023 $ 367 
2024 2,597 
2025 3,269 
2026 3,364 
Thereafter 17,412 
Total lease payments 27,009 
Less: imputed interest & other items (21,661)
Total operating lease liability $ 5,348 
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.