Published: 2023-02-08 16:29:59 ET

 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

 

FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2022

OR

 

☐	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: 814-00736

 

PENNANTPARK INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

MARYLAND		20-8250744
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1691 Michigan Avenue, Miami Beach, Florida		33139
(Address of principal executive offices)		(Zip Code)

 

(786) 297-9500

(Registrant’s Telephone Number, Including Area Code)

 

None

(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(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	PNNT	The New York Stock Exchange

 

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

Indicate by check mark whether the registrant has submitted electronically 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 the 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		☑		Smaller reporting company		☐
Emerging growth company		☐

 

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of February 8, 2023 was 65,224,500.

 

 

 

 

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PENNANTPARK INVESTMENT CORPORATION

FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2022

TABLE OF CONTENTS

 

PART I. CONSOLIDATED FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Statements of Assets and Liabilities as of December 31, 2022 (unaudited) and September 30, 2022		4
Consolidated Statements of Operations for the three months ended December 31, 2022 and 2021 (unaudited)		5
Consolidated Statements of Changes in Net Assets for the three months ended December 31, 2022 and 2021 (unaudited)		6
Consolidated Statements of Cash Flows for the three months ended December 31, 2022 and 2021 (unaudited)		7
Consolidated Schedules of Investments as of December 31, 2022 (unaudited) and September 30, 2022		8
Notes to Consolidated Financial Statements (unaudited)		19
Report of Independent Registered Public Accounting Firm (PCAOB ID 49)		37
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		39
Item 3. Quantitative and Qualitative Disclosures About Market Risk		52
Item 4. Controls and Procedures		53
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		54
Item 1A. Risk Factors		54
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		55
Item 3. Defaults Upon Senior Securities		55
Item 4. Mine Safety Disclosures		55
Item 5. Other Information		55
Item 6. Exhibits		56
SIGNATURES		57

 

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PART I—CONSOLIDATED FINANCIAL INFORMATION

 

We are filing this Quarterly Report on Form 10-Q, or the Report, in compliance with Rule 13a-13 as promulgated by the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In this Report, except where context suggest otherwise, the terms “Company,” “we,” “our” or “us” refers to PennantPark Investment Corporation and its consolidated subsidiaries; “PennantPark Investment” refers to only PennantPark Investment Corporation; “our SBIC Fund” refers collectively to our consolidated subsidiaries, PennantPark SBIC II LP, or SBIC II, and its general partner, PennantPark SBIC GP II, LLC; “Funding I” refers to PennantPark Investment Funding I, LLC, a wholly-owned subsidiary prior to deconsolidation on July 31, 2020; “Taxable Subsidiary” refers to PNNT Investment Holdings, LLC; “PSLF” refers to PennantPark Senior Loan Fund, LLC, an unconsolidated joint venture; “PTSF II” refers to PennantPark-TSO Senior Loan Fund II, LP, an unconsolidated limited partnership; “PennantPark Investment Advisers” or “Investment Adviser” refers to PennantPark Investment Advisers, LLC; “PennantPark Investment Administration” or “Administrator” refers to PennantPark Investment Administration, LLC; “SBA” refers to the Small Business Administration; “SBIC” refers to a small business investment company under the Small Business Investment Act of 1958, as amended, or the “1958 Act”; “BNP Credit Facility” refers to our revolving credit facility with BNP Paribas prior to deconsolidation of Funding I; “Truist Credit Facility” refers to our multi-currency, senior secured revolving credit facility with Truist Bank (formerly SunTrust Bank), as amended and restated; “2024 Notes” refers to our 5.50% Notes due 2024; “2026 Notes” refers to our 4.50% Notes due May 2026; “2026 Notes-2” refers to our 4.00% Notes due November 2026; “BDC” refers to a business development company under the Investment Company Act of 1940, as amended, or the “1940 Act”; “SBCAA” refers to the Small Business Credit Availability Act; “Code” refers to the Internal Revenue Code of 1986, as amended; and “RIC” refers to a regulated investment company under the Code. References to our portfolio, our investments and our business include investments we make through SBIC II and other consolidated subsidiaries.

3

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Item 1. Consolidated Financial Statements

 

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(In thousands, except share and per share data)

 

		December 31, 2022				September 30, 2022
		(unaudited)
Assets
Investments at fair value
Non-controlled, non-affiliated investments (cost—$929,937 and $882,513 respectively)		$	928,888			$	932,155
Non-controlled, affiliated investments (cost—$38,431 and $37,612, respectively)			35,579				34,760
Controlled, affiliated investments (cost—395,134 and $381,904, respectively)			231,568				259,386
Total investments (cost—$1,363,502 and $1,302,029, respectively)			1,196,035				1,226,301
Cash and cash equivalents (cost—$28,558 and $52,844, respectively)			28,556				52,666
Interest receivable			4,124				3,593
Receivable for investments sold			—				29,494
Distribution receivable			3,256				2,420
Prepaid expenses and other assets			4,036				4,036
Total assets			1,236,007				1,318,510
Liabilities
Distributions payable			10,762				9,784
Payable for investments purchased			8,325				—
Truist Credit Facility payable, at fair value (cost—$380,920 and $385,920, respectively) (See Notes 5 and 10)			367,308				376,687
2026 Notes payable, net (par— $150,000) (See Notes 5 and 10)			146,993				146,767
2026 Notes-2 payable, net (par— $165,000) (See Notes 5 and 10)			161,586				161,373
SBA debentures payable, net (par—$20,000) (See Notes 5 and 10)			19,701				19,686
Base-management fee payable, net (See Note 3)			4,602				4,849
Incentive fee payable (See Note 3)			2,192				—
Interest payable on debt			3,291				6,264
Accrued other expenses			2,155				6,639
Current tax liability			6,183				896
Total liabilities			733,098				732,945
Commitments and contingencies (See Note 11)
Net assets
Common stock, 65,224,500 shares issued and outstanding    Par value $0.001 per share and 100,000,000 shares authorized			65				65
Paid-in capital in excess of par value			748,169				748,169
Accumulated deficit			(245,325	)			(162,669	)
Total net assets		$	502,909			$	585,565
Total liabilities and net assets		$	1,236,007			$	1,318,510
Net asset value per share		$	7.71			$	8.98

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

4

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)

 

		Three Months Ended December 31,
		2022				2021
Investment income:
From non-controlled, non-affiliated investments:
Interest		$	22,231			$	15,540
Payment-in-kind			—				2,410
Other income			487				4,191
From controlled, affiliated investments:
Interest			2,858				2,267
Payment-in-kind			1,131				2,126
Dividend income			3,256				1,815
Total investment income			29,963				28,349
Expenses:
Base management fee (See Note 3)			4,602				5,109
Performance-based incentive fee (See Note 3)			2,192				2,657
Interest and expenses on debt (See Note 10)			9,729				6,886
Administrative services expenses (See Note 3)			266				250
Other general and administrative expenses			841				723
Expenses before provision for taxes			17,630				15,625
Provision for taxes on net investment income			2,000				200
Net expenses			19,630				15,825
Net investment income			10,333				12,524
Realized and unrealized gain (loss) on investments and debt:
Net realized gain (loss) on investments and debt:
Non-controlled, non-affiliated investments			4,064				5,201
Non-controlled and controlled, affiliated investments			—				(31,274	)
Debt extinguishment			—				(1,669	)
Net realized gain (loss) on investments and debt			4,064				(27,742	)
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments			(50,517	)			(49,603	)
Non-controlled and controlled, affiliated investments			(41,048	)			96,372
Provision for taxes on unrealized appreciation (depreciation) on investments			896				(5,045	)
Debt appreciation (depreciation) (See Notes 5 and 10)			4,378				(996	)
Net change in unrealized appreciation (depreciation) on investments and debt			(86,291	)			40,728
Net realized and unrealized gain (loss) from investments and debt			(82,227	)			12,986
Net increase (decrease) in net assets resulting from operations			(71,894	)			25,510
Net increase (decrease) in net assets resulting from operations per common share (See Note 7)		$	(1.10	)		$	0.38
Net investment income per common share		$	0.16			$	0.19

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)

(In thousands)

 

		Three Months Ended December 31,
		2022				2021
Net increase (decrease) in net assets resulting from operations:
Net investment income		$	10,333			$	12,524
Net realized gain (loss) on investments and debt			4,064				(27,742	)
Net change in unrealized appreciation (depreciation) on investments			(91,565	)			46,769
Net change in provision for taxes on unrealized appreciation (depreciation) on investments			896				(5,045	)
Net change in unrealized (appreciation) depreciation on debt			4,378				(996	)
Net increase (decrease) in net assets resulting from operations			(71,894	)			25,510
Distributions to stockholders:			(10,762	)			(8,045	)
Net increase (decrease) in net assets			(82,656	)			17,465
Net assets:
Beginning of period			585,565				660,144
End of period		$	502,909			$	677,609

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

 

		Three months ended December 31,
		2022				2021
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations		$	(71,894	)		$	25,510
Adjustments to reconcile net increase (decrease) in net assets resulting from    operations to net cash provided by (used in) operating activities:
Net change in net unrealized (appreciation) depreciation on investments			91,565				(46,769	)
Net change in unrealized appreciation (depreciation) on debt			(4,378	)			996
Net realized (gain) loss on investments			(4,064	)			26,073
Net accretion of discount and amortization of premium			(822	)			(2,065	)
Purchases of investments			(86,182	)			(295,136	)
Payment-in-kind income			(1,131	)			(4,451	)
Proceeds from dispositions of investments			30,620				132,246
Amortization of deferred financing costs			454				565
(Increase) or Decrease in:
Interest receivable			(531	)			(449	)
Receivables from investments sold			29,494				(12,821	)
Distribution receivable			(836	)			(121	)
Increase or (Decrease) in:
Payable for investments purchased			8,325				(7,812	)
Interest payable on debt			(2,973	)			(931	)
Base management fee payable, net			(247	)			529
Performance-based incentive fee payable, net			2,192				2,082
Deferred tax liability			5,287				5,045
Accrued other expenses			(4,485	)			159
Net cash provided by (used in) operating activities			(9,606	)			(177,350	)
Cash flows from financing activities:
Distributions paid to stockholders			(9,784	)			(8,045	)
Net repayments of the 2024 Notes issuance			—				(84,581	)
Proceeds from 2026 Notes-2 issuance			—				160,519
Borrowings under Truist Credit Facility			44,000				416,897
Repayments under Truist Credit Facility			(49,000	)			(288,218	)
Net cash provided by (used in) financing activities			(14,784	)			196,572
Net increase (decrease) in cash equivalents			(24,390	)			19,222
Effect of exchange rate changes on cash			280				2
Cash and cash equivalents, beginning of period			52,666				20,357
Cash and cash equivalents, end of period		$	28,556			$	39,581
Supplemental disclosure of cash flow information:
Interest paid		$	12,248			$	7,252
Taxes paid		$	299			$	695
Non-cash exchanges and conversions		$	—			$	(31,274	)

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited)

DECEMBER 31, 2022

(In thousands, except share data)

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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Issuer Name		Maturity / Expiration		Industry		Current  Coupon				Basis Point  Spread Above  Index (4)				Par /  Shares				Cost				Fair Value (3)
Investments in Non-Controlled, Non-Affiliated Portfolio Companies—184.7% of Net Assets (1), (2)
First Lien Secured Debt—122.1% of Net Assets
A1 Garage Merger Sub, LLC		12/22/2028		Personal, Food and Miscellaneous Services			11.12	%		3M L+650					11,215			$	10,998			$	10,997
A1 Garage Merger Sub, LLC - Unfunded Term Loan		12/21/2024		Personal, Food and Miscellaneous Services			—				—				5,747				-				-
A1 Garage Merger Sub, LLC (Revolver) (7)		12/22/2028		Personal, Food and Miscellaneous Services			—				—				2,532				-				-
Ad.net Acquisition, LLC (Revolver)		05/06/2026		Media			10.84	%		3M L+600					356				356				353
Ad.net Acquisition, LLC (Revolver) (7)		05/06/2026		Media			—				—				89				-				(1	)
Altamira Technologies, LLC (Revolver)		07/24/2025		Aerospace and Defense			10.73	%		3M L+600					50				50				49
Altamira Technologies, LLC (Revolver) (7)		07/24/2025		Aerospace and Defense			—				—				138				—				(2	)
American Insulated Glass, LLC		12/21/2023		Building Materials			9.25	%		3M L+550					3,319				3,304				3,319
Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7)		05/23/2024		Media			—				—				1,612				—				—
Any Hour Services		07/21/2027		Personal, Food and Miscellaneous Services			10.17	%		3M L+525					4,120				4,092				4,007
Any Hour Services (Revolver)		07/21/2027		Personal, Food and Miscellaneous Services			10.17	%		3M L+585					229				229				223
Any Hour Services (Revolver) (7)		07/21/2027		Personal, Food and Miscellaneous Services			—				—				918				—				(25	)
Apex Service Partners, LLC		07/31/2025		Personal, Food and Miscellaneous Services			7.60	%		1M L+550					1,331				1,331				1,324
Apex Service Partners, LLC Term Loan C		07/31/2025		Personal, Food and Miscellaneous Services			9.08	%		1M L+550					1,893				1,875				1,883
Apex Service Partners, LLC (Revolver)		07/31/2025		Personal, Food and Miscellaneous Services			9.67	%		3M L+525					645				645				641
Apex Service Partners, LLC (Revolver) (7)		07/31/2025		Personal, Food and Miscellaneous Services			—				—				287				—				(1	)
Applied Technical Services, LLC		12/29/2026		Environmental Services			9.69	%		3M L+575					1,534				1,519				1,495
Applied Technical Services, LLC (7)		04/21/2023		Environmental Services			—				—				1,457				—				(20	)
Applied Technical Services, LLC (Revolver)		12/29/2026		Environmental Services			12.25	%		3M P+475					400				400				390
Applied Technical Services, LLC (Revolver) (7)		12/29/2026		Environmental Services			—				—				600				—				(15	)
Arcfield Acquisition Corp. (Revolver) (7)		03/07/2028		Aerospace and Defense			—				—				2,263				—				(45	)
Berwick Industrial Park		04/28/2023		Buildings and Real Estate			11.00	%			—				4,000				3,974				3,956
Beta Plus Technologies, Inc.		07/01/2029		Business Services			9.37	%		SOFR+525					4,988				4,895				4,938
Blackhawk Industrial Distribution, Inc.		09/17/2024		Distribution			9.65	%		3M L+500					1,407				1,392				1,376
Blackhawk Industrial Distribution, Inc.(7)		09/17/2024		Distribution			—				—				3,808				—				(48	)
Blackhawk Industrial Distribution, Inc. (Revolver)		09/17/2024		Distribution			10.06	%		3M L+500					1,030				1,030				976
Blackhawk Industrial Distribution, Inc. (Revolver) (7)		09/17/2024		Distribution			—				—				2,402				—				(125	)
Broder Bros., Co.		12/04/2025		Consumer Products			9.60	%		3M L+600					10,031				10,031				10,031
Cartessa Aesthetics, LLC		05/13/2028		Distribution			10.58	%		1M L+600					34,315				33,680				33,972
Cartessa Aesthetics, LLC - (Revolver)		05/13/2028		Distribution			10.58	%		1M L+600					1,265				1,265				1,253
Cartessa Aesthetics, LLC - (Revolver) (7)		05/13/2028		Distribution			—				—				2,297				—				(23	)
CF512, Inc.		08/20/2026		Media			10.75	%		3M L+600					6,720				6,635				6,585
CF512, Inc.(Revolver) (7)		08/20/2026		Media			—				—				909				—				(18	)
Compex Legal Services, Inc.		02/09/2026		Business Services			9.97	%		3M L+525					851				841				849
Compex Legal Services, Inc. (Revolver)		02/07/2025		Business Services			9.61	%		3M L+525					328				328				327
Compex Legal Services, Inc. (Revolver) (7)		02/07/2025		Business Services			—				—				328				—				(1	)
Connatix Buyer, Inc. (7)		01/13/2023		Media			—				—				3,158				—				(71	)
Connatix Buyer, Inc. (Revolver) (7)		07/13/2027		Media			—				—				1,859				—				(60	)
Crane 1 Services, Inc.		08/16/2027		Personal, Food and Miscellaneous Services			10.16	%		3M L+575					2,595				2,568				2,569
Crane 1 Services, Inc. (Revolver)		08/16/2027		Personal, Food and Miscellaneous Services			10.48	%		1M L+575					175				175				173
Crane 1 Services, Inc. (Revolver) (7)		08/16/2027		Personal, Food and Miscellaneous Services			—				—				117				—				(1	)
DermaRite Industries LLC		06/30/2023		Manufacturing / Basic Industries			11.73	%		1M L+700					8,755				8,743				5,288
Dr. Squatch, LLC		08/31/2027		Personal and Non-Durable Consumer Products			9.69	%		3M L+600					12,897				12,720				12,704
Dr. Squatch, LLC (7)		08/27/2026		Personal and Non-Durable Consumer Products			—				—				2,000				—				(10	)
Dr. Squatch, LLC (Revolver)		08/31/2027		Personal and Non-Durable Consumer Products			10.46	%		1M L+600					775				775				764
Dr. Squatch, LLC (Revolver) (7)		08/31/2027		Personal and Non-Durable Consumer Products			—				—				1,551				—				(23	)
DRS Holdings III, Inc. (Revolver) (7)		11/03/2025		Consumer Products			—				—				1,783				—				(57	)
ECL Entertainment, LLC		05/01/2028		Hotels, Motels, Inns and Gaming			11.88	%		1M L+750					19,108				18,974				19,044
ECM Industries, LLC (Revolver)		12/23/2025		Electronics			9.50	%		3M L+475					194				194				185
ECM Industries, LLC (Revolver) (7)		12/23/2025		Electronics			—				—				323				—				(15	)
EDS Buyer, LLC		12/22/2028		Aerospace and Defense			10.91	%		3M L+625					7,500				7,388				7,388
EDS Buyer, LLC - Unfunded Term Loan		12/22/2028		Aerospace and Defense			—				—				5,625				—				—
EDS Buyer, LLC - (Revolver) (7)		12/22/2028		Aerospace and Defense			—				—				1,688				—				—
Exigo Intermediate II, LLC		03/15/2027		Business Services			10.13	%		3M L+575					24,813				24,485				24,316
Exigo Intermediate II, LLC (7)		03/15/2024		Business Services			—				—				7,424				—				(93	)
Exigo Intermediate II, LLC (Revolver)		03/15/2027		Business Services			10.13	%		3M L+575					371				371				364
Exigo Intermediate II, LLC (Revolver) (7)		03/15/2027		Business Services			—				—				1,485				—				(30	)
Fairbanks Morse Defense		06/17/2028		Aerospace and Defense			9.48	%		3M L+475					738				735				699
Gantech Acquisition Corp.		05/14/2026		Business Services			10.63	%		1M L+625					16,723				16,477				16,221
Gantech Acquisition Corp. (Revolver)		05/14/2026		Business Services			10.57	%		1M L+625					664				664				644
Gantech Acquisition Corp. (Revolver) (7)		05/14/2026		Business Services			—				—				1,327				—				(40	)
Graffiti Buyer, Inc.		08/10/2027		Distribution			10.23	%		3M L+550					174				172				168
Graffiti Buyer, Inc. (7)		08/10/2023		Distribution			—				—				718				—				(16	)
Graffiti Buyer, Inc. (Revolver)		08/10/2027		Distribution			10.51	%		3M L+575					310				310				297
Graffiti Buyer, Inc. (Revolver) (7)		08/10/2027		Distribution			—				—				459				—				(18	)
Hancock Roofing and Construction L.L.C.		12/31/2026		Insurance			9.79	%		1M L+550					160				160				157
Hancock Roofing and Construction L.L.C. (Revolver) (7)		12/31/2026		Insurance			—				—				590				—				(12	)
Holdco Sands Intermediate, LLC		11/23/2028		Aerospace and Defense			10.17	%		3M L+600					1,913				1,879				1,875
Holdco Sands Intermediate, LLC (Revolver) (7)		11/23/2027		Aerospace and Defense			—				—				3,941				—				(79	)
HV Watterson Holdings, LLC		12/17/2026		Business Services			10.73	%		1M L+600					281				279				267
HV Watterson Holdings, LLC (7)		12/17/2026		Business Services			—				—				2,219				—				(99	)
HV Watterson Holdings, LLC - (Revolver)		12/17/2026		Business Services			9.69	%		3M L+600					200				200				190
HV Watterson Holdings, LLC - (Revolver)(7)		12/17/2026		Business Services			—				—				1,050				—				(55	)
HW Holdco, LLC		12/10/2024		Media			7.81	%		3M L+500					10,162				10,063				10,035
HW Holdco, LLC (7)		12/10/2024		Media			—				—				3,049				—				(8	)
HW Holdco, LLC (Revolver) (7)		12/10/2024		Media			—				—				3,387				—				(42	)
Icon Partners III, LP		05/11/2028		Auto Sector			8.82	%		3M L+450					1,990				1,593				1,336
IDC Infusion Services, Inc.		12/30/2026		Healthcare, Education and Childcare			11.73	%		3M L+700					3,676				3,572				3,602
IDC Infusion Services, Inc. (Revolver) (7)		12/30/2026		Healthcare, Education and Childcare			—				—				4,167				—				(146	)
IG Investments Holdings, LLC (Revolver)		09/22/2027		Business Services			10.39	%		3M L+600					191				191				188
IG Investments Holdings, LLC (Revolver) (7)		09/22/2027		Business Services			—				—				286				—				(4	)
Imagine Acquisitionco, LLC (7)		11/15/2027		Business Services			—				—				2,341				—				(47	)
Imagine Acquisitionco, LLC (Revolver) (7)		11/15/2027		Business Services			—				—				1,685				—				(51	)
Inception Fertility Ventures, LLC		12/07/2023		Healthcare, Education and Childcare			11.95	%		3M L+715					20,454				20,245				20,045

 

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

9

---

 

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

DECEMBER 31, 2022

(In thousands, except share data)

 

Issuer Name		Maturity / Expiration		Industry		Current  Coupon				Basis Point  Spread Above  Index (4)				Par /  Shares				Cost				Fair Value (3)
Infinity Home Services Holdco, Inc.		12/28/2028		Personal, Food and Miscellaneous Services			11.40	%		3M L+685					6,136			$	6,014			$	6,014
Infinity Home Services Holdco, Inc. - Unfunded Term Loan		12/28/2023		Personal, Food and Miscellaneous Services			—				—				3,230				—				—
Infinity Home Services Holdco, Inc.(Revolver) (7)		12/28/2028		Personal, Food and Miscellaneous Services			—				—				1,292				—				—
Infolinks Media Buyco, LLC (7)		11/01/2023		Media			—				—				2,372				—				24
Integrity Marketing Acquisition, LLC		08/27/2025		Insurance			8.83	%		3M L+550					9,930				9,880				9,781
ITI Holdings, Inc.		03/03/2028		Business Services			10.08	%		3M L+550					8,905				8,767				8,727
ITI Holdings, Inc. (Revolver)		03/03/2028		Business Services			10.77	%		3M L+550					513				513				502
ITI Holdings, Inc. (Revolver) (7)		03/03/2028		Business Services			—				—				978				—				(20	)
K2 Pure Solutions NoCal, L.P.		12/20/2023		Chemicals, Plastics and Rubber			12.38	%		1M L+800					10,955				10,917				10,955
K2 Pure Solutions NoCal, L.P. (Revolver) (7)		12/20/2023		Chemicals, Plastics and Rubber			—				—				1,938				—				—
Kinetic Purchaser, LLC		11/10/2027		Consumer Products			10.73	%		3M L+600					24,280				23,771				23,673
Kinetic Purchaser, LLC (Revolver)		11/10/2026		Consumer Products			10.73	%		3M L+600					4,854				4,854				4,732
Lash OpCo, LLC		02/18/2027		Consumer Products			11.78	%		1M L+700					2,828				2,777				2,771
Lash OpCo, LLC (Revolver)		08/16/2026		Consumer Products			11.58	%		1M L+700					742				742				728
Lash OpCo, LLC (Revolver) (7)		08/16/2026		Consumer Products			—				—				1,077				—				(22	)
LAV Gear Holdings, Inc.		10/31/2024		Leisure, Amusement, Motion Pictures, Entertainment			10.23	%		1M L+565					2,056				2,034				2,027
						(PIK 5.50%)
Ledge Lounger, Inc.		11/09/2026		Consumer Products			10.98	%		3M L+625					9,154				9,007				8,971
Ledge Lounger, Inc. (Revolver)		11/09/2026		Consumer Products			10.98	%		3M L+625					644				644				631
Ledge Lounger, Inc. (Revolver) (7)		11/09/2026		Consumer Products			—				—				1,288				—				(26	)
Lightspeed Buyer Inc.		02/03/2026		Healthcare, Education and Childcare			9.88	%		1M L+575					2,215				2,200				2,159
Lightspeed Buyer Inc. (Revolver)		02/03/2026		Healthcare, Education and Childcare			9.88	%		1M L+575					505				505				493
Lightspeed Buyer Inc. (Revolver) (7)		02/03/2026		Healthcare, Education and Childcare			—				—				661				—				(17	)
Limerick Town Cener, LLC		09/27/2023		Real Estate			12.50	%			—				3,000				2,978				2,964
LSF9 Atlantis Holdings, LLC		03/31/2029		Retail			11.83	%		SOFR+725					5,925				5,706				5,744
Mars Acquisition Holdings Corp.		05/14/2026		Media			10.23	%		3M L+550					4,913				4,820				4,864
Mars Acquisition Holdings Corp. (Revolver)(7)		05/14/2026		Media			—				—				1,209				—				(12	)
MBS Holdings, Inc. (Revolver) (7)		04/16/2027		Telecommunications			—				—				694				—				(7	)
MDI Buyer, Inc.		07/25/2028		Chemicals, Plastics and Rubber			10.49	%		3M L+600					20,287				19,949				19,835
MDI Buyer, Inc. (Revolver)		07/25/2028		Chemicals, Plastics and Rubber			10.26	%		3M L+600					683				683				668
MDI Buyer, Inc. (Revolver) (7)		07/25/2028		Chemicals, Plastics and Rubber			—				—				1,544				—				(19	)
Meadowlark Acquirer, LLC		12/10/2027		Business Services			9.70	%		3M L+550					1,317				1,305				1,304
Meadowlark Acquirer, LLC Term Loan I (7)		12/10/2027		Business Services			—				—				1,676				—				—
Meadowlark Acquirer, LLC Term Loan II (7)		12/10/2027		Business Services			—				—				8,922				—				—
Meadowlark Acquirer, LLC (Revolver) (7)		12/10/2027		Business Services			—				—				1,685				—				(17	)
Municipal Emergency Services, Inc.		09/28/2027		Distribution			8.91	%		3M L+500					1,340				1,328				1,286
Municipal Emergency Services, Inc. (7)		09/28/2027		Distribution			—				—				539				—				(16	)
Municipal Emergency Services, Inc. - Unfunded Term Loan A		06/16/2023		Distribution			—				—				1,255				—				(31	)
Municipal Emergency Services, Inc. - Unfunded Term Loan B		12/16/2024		Distribution			—				—				2,510				—				(100	)
Municipal Emergency Services, Inc. (Revolver)		09/28/2027		Distribution			9.83	%		3M L+500					1,128				1,128				1,083
Municipal Emergency Services, Inc. (Revolver) (7)		09/28/2027		Distribution			—				—				752				—				(30	)
NBH Group LLC (Revolver) (7)		08/19/2026		Healthcare, Education and Childcare			—				—				1,163				—				—
Neptune Flood Incorporated		10/14/2026		Financial Services			10.28	%		1M L+600					3,894				3,871				3,894
One Stop Mailing, LLC		05/07/2027		Cargo Transport			10.63	%		3M L+625					6,990				6,876				6,781
ORL Acquisition, Inc.		09/03/2027		Business Services			9.98	%		3M L+525					4,442				4,370				4,442
ORL Acquisition, Inc. (Revolver) (7)		09/03/2027		Business Services			—				—				597				—				—
Ox Two, LLC		05/18/2026		Building Materials			10.84	%		1M L+700					15,352				15,164				14,891
Ox Two, LLC (Revolver)		05/18/2026		Building Materials			10.84	%		3M L+700					1,935				1,935				1,877
Ox Two, LLC (Revolver) (7)		05/18/2026		Building Materials			—				—				484				—				(15	)
PL Acquisitionco, LLC (Revolver) (7)		11/09/2027		Retail			—				—				3,236				—				(81	)
PRA Events, Inc.		08/07/2025		Business Services			15.23	%		3M L+1,050					24,907				21,694				24,907
						(PIK 10.5%)
PRA Events, Inc. (Revolver) (7)		08/07/2025		Business Services			—				—				2,000				—				—
Pragmatic Institute, LLC		07/06/2028		Business Services			10.33	%		3M L+575					35,252				34,757				34,899
Pragmatic Institute, LLC Term Loan (7)		07/06/2028		Business Services			—				—				7,193				—				—
Pragmatic Institute, LL (Revolver)		07/06/2028		Business Services			10.33	%		3M L+575					959				959				949
Pragmatic Institute, LL (Revolver) (7)		07/06/2028		Business Services			—				—				3,836				—				(38	)
Quantic Electronics, LLC		11/19/2026		Aerospace and Defense			8.11	%		1M L+625					1,500				1,488				1,470
Quantic Electronics, LLC - Unfunded Term Loan		11/19/2026		Aerospace and Defense			—				—				584				—				(6	)
Quantic Electronics, LLC (Revolver)		11/19/2026		Aerospace and Defense			10.84	%		3M L+600					423				423				414
Quantic Electronics, LLC (Revolver) (7)		11/19/2026		Aerospace and Defense			—				—				106				—				(2	)
Questex, LLC		09/09/2024		Media			8.98	%		3M L+500					21,544				21,401				21,113
Questex, LLC (Revolver) (7)		09/09/2024		Media			—				—				3,590				—				(72	)
Radius Aerospace, Inc. (Revolver)		03/31/2025		Aerospace and Defense			9.19	%		3M L+575					445				445				437
Radius Aerospace, Inc. (Revolver) (7)		03/31/2025		Aerospace and Defense			—				—				1,782				—				(36	)
Rancho Health MSO, Inc. (7)		12/18/2025		Healthcare, Education and Childcare			10.48	%		3M L+575					289				289				289
Rancho Health MSO, Inc. - Unfunded Term Loan		12/18/2025		Healthcare, Education and Childcare			—				—				761				—				—
Rancho Health MSO, Inc. (Revolver) (7)		12/18/2025		Healthcare, Education and Childcare			—				—				525				—				—
Reception Purchaser, LLC		02/28/2028		Transportation			10.42	%		SOFR+600					5,970				5,888				5,731
Recteq, LLC (Revolver) (7)		01/29/2026		Consumer Products			—				—				1,127				—				(39	)
Research Now Group, Inc. and Dynata, LLC		12/20/2024		Business Services			8.84	%		3M L+550					126				126				93
Riverpoint Medical, LLC (Revolver) (7)		06/20/2025		Healthcare, Education and Childcare			—				—				364				—				(9	)
Riverside Assessments, LLC		03/10/2025		Education			9.78	%		3M L+625					12,873				12,692				12,648
Sales Benchmark Index LLC (Revolver) (7)		01/03/2025		Business Services			—				—				732				—				(4	)
Sargent & Greenleaf Inc. (Revolver)		12/20/2024		Electronics			10.27	%		3M L+550					593				593				584
Sargent & Greenleaf Inc. (Revolver) (7)		12/20/2024		Electronics			—				—				5				-				-
Schlesinger Global, Inc.		07/14/2025		Business Services			11.98	%		3M L+700					4,678				4,629				4,561
Schlesinger Global, Inc. (Revolver)		07/14/2025		Business Services			10.42	%		3M L+600					30				30				30
						(PIK 0.5%)
Schlesinger Global, Inc. (Revolver)(7)		07/14/2025		Business Services			—				—				8				—				—
Seaway Buyer, LLC		06/13/2029		Chemicals, Plastics and Rubber			10.73	%		1M L+575					4,788				4,720				4,716
Seaway Buyer, LLC (Revolver)(7)		06/13/2029		Chemicals, Plastics and Rubber			—				—				3,126				—				(47	)
Shiftkey, LLC		06/21/2027		Business Services			10.59	%		1M L+575					17,910				17,747				17,803

 

 

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

10

---

 

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited)—(Continued)

DECEMBER 31, 2022

(In thousands, except share data)

Issuer Name		Maturity / Expiration				Industry		Current  Coupon				Basis Point  Spread Above  Index (4)				Par /  Shares				Cost				Fair Value (3)
Sigma Defense Systems, LLC		12/18/2025				Telecommunications			13.23	%		1M L+850					31,476			$	30,850			$	30,847
Sigma Defense Systems, LLC (Revolver)		12/18/2025				Telecommunications			13.23	%		1M L+850					1,190				1,190				1,167
Sigma Defense Systems, LLC (Revolver) (7)		12/18/2025				Telecommunications			—				—				1,786				—				(36	)
Signature Systems Holding Company (Revolver) (7)		05/03/2024				Chemicals, Plastics and Rubber			—				—				2,016				—				—
Solutionreach, Inc. (Revolver) (7)		01/17/2024				Communications			—				—				1,665				—				(45	)
Spendmend Holdings LLC		03/01/2028				Business Services			10.17	%		1M L+575					9,680				9,562				9,361
Spendmend Holdings LLC (7)		03/01/2023				Business Services			—				—				2,784				—				(71	)
Spendmend Holdings LLC - Funded Revolver		03/01/2028				Business Services			10.17	%		3M L+575					187				187				181
Spendmend Holdings LLC - Unfunded Revolver (7)		03/01/2028				Business Services			—				—				1,215				—				(40	)
System Planning and Analysis, Inc. - (Revolver) (7)  (f/k/a Management Consulting & Research, LLC)		08/16/2027				Aerospace and Defense			—				—				2,925				—				(38	)
The Bluebird Group LLC		07/27/2026				Business Services			10.92	%		3M L+700					4,859				4,777				4,767
The Bluebird Group LLC (Revolver) (7)		07/27/2026				Business Services			—				—				734				—				(14	)
The Vertex Companies, LLC		08/30/2027				Business Services			9.39	%		3M L+550					1,750				1,734				1,713
The Vertex Companies, LLC (7)		08/30/2027				Business Services			—				—				466				—				(5	)
The Vertex Companies, LLC (Revolver)		08/30/2027				Business Services			9.79	%		3M L+550					148				148				145
The Vertex Companies, LLC (Revolver) (7)		08/30/2027				Business Services			—				—				592				—				(12	)
TVC Enterprises, LLC		03/26/2026				Transportation			9.82	%		1M L+600					12,628				12,395				12,313
TVC Enterprises, LLC (Revolver) (7)		03/26/2026				Transportation			—				—				1,370				—				(34	)
TWS Acquisition Corporation		06/16/2025				Education			11.46	%		1M L+625					1,143				1,143				1,143
TWS Acquisition Corporation (Revolver) (7)		06/16/2025				Education			—				—				1,644				—				—
Tyto Athene, LLC (Revolver) (7)		04/01/2026				Aerospace and Defense			—				—				364				—				(34	)
Unique Indoor Comfort, LLC		05/24/2027				Home and Office Furnishings			9.98	%		1M L+525					36,741				36,333				35,785
Unique Indoor Comfort, LLC (7)		05/24/2027				Home and Office Furnishings			—				—				6,540				—				(105	)
Unique Indoor Comfort, LLC (Revolver) (7)		05/24/2027				Home and Office Furnishings			—				—				3,000				—				(78	)
Walker Edison Furniture Company LLC(6)		03/31/2027				Home and Office Furnishings			—				—				25,369				24,881				12,821
Wildcat Buyerco, Inc.		02/27/2026				Electronics			10.21	%		3M L+575					3,826				3,770				3,711
Wildcat Buyerco, Inc. (Revolver)		02/27/2026				Electronics			10.12	%		3M L+585					199				199				185
Wildcat Buyerco, Inc. (Revolver) (7)		02/27/2026				Electronics			—				—				376				—				(26	)
Zips Car Wash, LLC		03/01/2024				Auto Sector			11.53	%		3M L+725					2,624				2,607				2,565
Total First Lien Secured Debt																					632,198				614,127
Second Lien Secured Debt—26.0% of Net Assets
Ascensus Holdings, Inc.		08/02/2028				Financial Services			10.25	%		3M L+650					3,000				2,688				2,605
Atlas Purchaser, Inc		05/07/2029				Telecommunications			14.20	%		3M L+900					17,000				16,563				13,192
Best Practice Associates LLC		06/29/2027				Aerospace and Defense			13.73	%		3M L+900					17,825				17,519				17,290
Burgess Point Purchaser Corporation		07/28/2030				Auto Sector			13.16	%		3M L+900					8,000				7,858				7,680
Data Axle, Inc.		04/03/2024				Other Media			12.92	%		3M L+925					20,400				20,306				20,196
ENC Parent Corporation		08/19/2029				Business Services			12.23	%		3M L+750					7,500				7,434				6,900
Halo Buyer, Inc.		07/06/2026				Consumer Products			12.63	%		1M L+825					32,500				32,180				31,769
Inventus Power, Inc.		09/29/2024				Electronics			13.23	%	<